The IDV or the insured declared value is a crucial car insurance component. The IDV validates the fact that your car ages and depreciates in value as the years pile on. So the value of a used car is never similar to that of a brand new car. Subsequently, the vehicle insurance covers of both differ too. IDV is the most important value of a car insurance policy and all claims are paid as a percentage of IDV.
Take a look at this article to understand why it is important to set the IDV correctly when renewing your car insurance policy.
Top #7 Reasons why IDV is crucial while renewing your Car Insurance Policy:
- Helps to get the correct insurance cover: First and foremost, you get to choose the right insurance cover for your vehicle. If the IDV is high, you know your car is in good shape and needs a lot of protection. You can then opt for the best possible comprehensive car insurance cover to ensure your precious vehicle stays protected at all times against a variety of issues.
- Helps in choosing the right plan: If after the IDV is calculated, you find that your car’s current value is not very high, you can get a third party cover. If however, you see that the value is still quite high, you can go for a more well-rounded comprehensive cover. This can be done at the time of a car insurance renewal. The IDV, therefore, helps you to choose the right plan for your vehicle at all times.
- Helps to arrive at the correct premium: A vehicle insurance plan is meant to cover the car’s current value. So if the IDV is high, the cover is high too and so is the premium. You, therefore, need the IDV calculations to be spot on. You need to know what the value is and see whether or not you are charged the accurate premium amount when you go in for an online car insurance renewal.
- Gives you a realistic idea about your car’s value: Next and very importantly, the IDV figures give you a realistic idea about your car’s value. A vehicle often becomes too precious and it hurts to accept that it is old and aging. You, therefore, need the IDV assessment done to get the real picture in front of you.
- Allows you to negotiate: When you opt for a car insurance renewal, different insurance providers offer the plans at different rates. When you are already aware of the IDV, you get in a better position to negotiate. This may lead to you finding a great cover at a low rate.
- Helps in choosing add-on covers: There is a car insurance rider known as the zero-depreciation cover. If you have this rider, the IDV doesn’t come in action as your car is protected against depreciation. Knowing what the standard IDV rates help you to decide whether or not you need this rider.
- Helps fix the deductible: Last but not least, you get to set an appropriate deductible when you go in for your car insurance renewal. If the IDV suggests your car has depreciated considerably in value, you can opt for a higher deductible and vice-versa.
Keep these things in mind when you get an online car insurance renewal done. Make sure the IDV is always calculated. Correctly. As you saw, this makes a lot of difference. Most importantly, it helps you to get a true idea about the value of your car, which in turn allows you to choose the best possible motor insurance policy. So double check the IDV figures to rule out any errors whatsoever.