Definition
Insured Declared Value (IDV)
Insured Declared Value is the current market value of a vehicle fixed at policy inception, representing the maximum the insurer will pay on theft or total loss.
IDV is derived from the manufacturer's listed selling price less age-based depreciation, and it effectively acts as the sum insured for the own-damage portion of motor insurance. It is recalculated at each renewal as the vehicle ages.
A realistic IDV matters: setting it too low cuts the payout on a total-loss or theft claim, while inflating it only raises premium without increasing genuine recovery since claims settle at actual value within the IDV ceiling. For modifications or accessories, separate sums insured may be needed.
Related terms
- Own-Damage CoverOwn-damage (OD) cover compensates for damage to or loss of the insured's own vehicle from accidents, theft, fire and natural calamities.
- IDV DepreciationIDV depreciation is the standardised reduction in a vehicle's Insured Declared Value applied each year to reflect age-based loss in market value.
- Total LossTotal loss in motor insurance is when a vehicle is stolen or damaged beyond economical repair, triggering settlement at the Insured Declared Value.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.