Why should you consider IDV when buying bike insurance?
Understanding certain complex terminologies of bike insurance plans can be confusing for a common man. But this does not mean that you should not purchase bike insurance. In fact, third party insurance is mandatory by law under the Motor Vehicle Act, 1988.
Insured Declared Value (IDV) is one such term that you should be aware of. IDV comes in handy when buying and renewing bike insurance plan. Hence, having a basic understanding of it is essential. And this article helps you with just that.
What Is IDV In Bike Insurance?
IDV is nothing but the maximum amount you receive as compensation from your insurer in case of total damage or loss of your vehicle. In simple words, IDV is the current market value of your bike. Also, it is the maximum claimable amount on your insurance policy. Hence, calculating the right IDV of your bike is crucial. Read more to know what is IDV in bike insurance.
How Is IDV Calculated?
IDV is calculated based on certain factors such as –
- Bike registration details
- Bike registration location
- Registration date of the first purchase (in case of a resell)
- Bike description
- Make and model of the bike
Apart from this, it is essential to know that the on-road cost of the valuation is not considered. This includes the registration cost and taxes. IDV is calculated depending on the maximum retail price of the vehicle.
Bike Insurance Premiums Are Based On IDV
The premiums paid towards bike insurance plan during purchase/renewal are associated with the IDV of your bike. As a matter of fact, the premium amounts are directly proportional to the IDV. If you choose higher IDV, then the premiums will be high. Hence, as your bikes ages, the premiums decrease.
Right Policy = Right IDV
Determining the right IDV of your bike will help you choose adequate coverage. Like we mentioned earlier, IDV is the maximum amount that you will receive in compensation in case your vehicle faces total loss/damage.
For instance, if your bike gets stolen in the first few months of the purchase, you do not have to worry. The insurer will pay you based on the IDV that is decided upon. So, in this case, if you have chosen an insurance plan with lower premiums, the compensation received will be less too. So, choose wisely.
Ideally, the IDV should be close to the current market value of the bike. So in case of any loss or accident, the compensation will be made accordingly.
Things To Keep In Mind
Here are a few things that you need to keep in mind when buying bike insurance.
- Determine the IDV of the bike before purchasing the insurance
- Choose the insurance depending on the IDV offered by the insurer
IDV is essential when buying bike insurance. You cannot quote IDV at a low rate to pay less premiums, as it means less coverage. Similarly, IDV cannot be higher than the current market value of the bike, as you will not receive high compensation when claiming.
Choosing the right insurance plan that covers all your needs is crucial. In case you are looking for adequate coverage, browse through Bajaj Allianz bike insurance plans available on Finserv MARKET.