The maximum amount your bike can be insured is up to the insured declared value or IDV. This is the amount certified in the event of the total loss of the two-wheeler or unrecoverable theft.  

A two-wheeler lifespan is generally accepted to be five years. As a result, the total cost of the bike is depreciated over five years. The depreciation begins slowly and gradually increases with each passing year.  

If you need to insure a bike over five years old, the IDV is determined through mutual discussion between the insurer and the insured. This is because the depreciated value includes more than just the scrap value of the two-wheeler components. 

The significance of IDV: 

If you’re wondering what is idv in bike insurance, the IDV is the maximum amount the insurer is liable for if your bike is stolen or totalled. Total loss means that the costs of restoring the two-wheeler to roadworthy condition are significantly higher than the two-wheeler’s value. Typically, the insurer will declare the bike a total loss if the repair cost exceeds 75% of the IDV. 

The effect of IDV on the cost of two-wheeler insurance: 

Your two-wheelers IDV directly impacts the bike insurance premium you must pay. Because it is the maximum amount an insurer must pay, a lower IDV translates to a lower liability for the insurer, allowing them to charge a lower two-wheeler insurance premium. 

However, an unreasonably low IDV can be costly if you need to claim it. This is because IDV, rather than the actual market value of the bike, is considered when honouring claims. As a result, a lower IDV would result in a lower payout, forcing you to pay much more out of pocket to replace your bike. 

IDV for two wheelers aged five years and up: 

If your bike is more than five years old or is a discontinued model, the insured declared value is determined by mutual agreement between the insurer and you.

Nonetheless, most add-on covers may not be available after five years. This includes zero-depreciation coverage, engine and gearbox coverage, return-to-invoice coverage, and so on. 

Furthermore, some insurers may raise the premium if the bike is older and more likely to break down sooner rather than later. This may occasionally be prohibitively expensive for a few two-wheeler owners. To find the ideal premium, check bike insurance online and compare the available options.  

However, the third-party bicycle insurance premium remains the same as the law requires. As a result, many older bikes are only covered by third-party two-wheeler insurance and personal accident coverage, but not by their own damage coverage. 

IDV during policy renewal: 

Most insurers determine the IDV at renewal by reducing the previous IDV per the IRDAI’s* depreciation schedule. This does not imply that you should accept the insurer’s proposed change. It would help if you weighed the new IDV against the market value of your two-wheeler.  

You should also check to see if the insurer’s damage premium has been reduced accordingly. It is critical to remember what is idv in bike insurance and know that it affects your damage premium. The premium for third-party bike insurance is fixed by IRDAI* and determined by your bike’s cubic capacity. 

Visit the official website of IRDAI for further details.

‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘ 

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply