Why is IDV essential for two-wheeler insurance and what does it mean?


28 Jun 2023

Unveiling the Essence of IDV: Two-Wheeler Insurance Demystified

When it comes to safeguarding our two-wheelers from unforeseen circumstances, insurance plays a crucial role. One important factor to consider when purchasing two-wheeler insurance is the Insured Declared Value (IDV). IDV serves as a critical component in determining the coverage and premium of your policy. In this blog, we will explore why IDV in two-wheeler insurance and what it signifies.

Let's understand what IDV means in bike insurance

Insured Declared Value (IDV) represents the maximum sum assured by an insurance company in case of total loss or theft of your two-wheeler. In simpler terms, it denotes the current market value of your vehicle after accounting for depreciation. IDV is calculated based on the manufacturer's listed selling price and the age of the vehicle. As your two-wheeler ages, the IDV decreases due to depreciation.

Why is it essential to have IDV in bike insurance?

It is important to ensure that the IDV is adequate to cover the expenses associated with replacing or repairing your vehicle.

  1. Basis for coverage amount

The IDV of your bike determines the maximum coverage you can receive in the event of theft or total loss. Opting for a lower IDV may result in insufficient coverage, leaving you to bear the additional costs out of pocket. Conversely, a higher IDV may lead to a higher premium, but it provides enhanced protection.

  1. Premium calculation

The premium you pay for your two-wheeler insurance is directly linked to the IDV. As the IDV increases, so does the premium. A higher IDV implies a greater potential loss for the insurer, leading to a higher premium. Conversely, a lower IDV reduces the insurer's liability, resulting in a lower premium. It is crucial to strike a balance between the IDV and premium to ensure adequate coverage at a reasonable cost.

  1. Claims settlement

In case of theft or total loss of your bike, the IDV determines the compensation amount you will receive from kotak general insurance. It represents the maximum value the insurer will reimburse you for your loss. It is essential to be aware of the IDV mentioned in your policy to avoid any misunderstandings during the claims settlement process.

  1. Resale value

The IDV of your two-wheeler is closely linked to its market value. As the IDV decreases with time, it reflects the depreciation of your vehicle. When you plan to sell your bike, potential buyers often consider the IDV as an indicator of the vehicle's condition and value. A higher IDV can make your two-wheeler more attractive to buyers, potentially leading to a better resale value.


Insured Declared Value (IDV) is a significant aspect of two-wheeler insurance that determines the coverage, premium, and claims settlement for your vehicle. It serves as a reflection of your vehicle's current market value, considering depreciation over time. With a brief understanding about the importance of IDV, you can make a right decision while purchasing two-wheeler insurance, ensuring adequate coverage and financial protection. Remember to strike a balance between the IDV and premium to secure a policy that meets your requirements effectively. To get more insights on IDV, join us at kotak general insurance.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.