Key Facts to Know Regarding Your Two Wheeler’s IDV

The joy of riding a bike while feeling the wind against your face and excitement on the open road is unmatched. But with excitement safeguarding your bike with the right yet cheap bike insurance is necessary.

Buying the right bike insurance makes it crucial for bike owners to understand the term IDV,  its implications, and critical facts. This article will explore the IDV in 2-wheeler insurance and its key facts to get the most out of it.

 What is Two-Wheeler Insurance IDV?

IDV stands for the Insured Declared Value. The maximum sum the insurance company assures in the event of a total loss or theft of your two-wheeler. IDV is crucial while determining the insurance for bikes/two-wheelers, representing its current market value.

For instance, if you ride your Triumph bike, and suddenly you meet with an accident and suffer from the total loss of your bike, then the amount of compensation you will get from Triumph bike insurance will be the IDV.

Now let’s see how it is calculated.

 How is the IDV value of a two-wheeler calculated?

The IDV value of a two-wheeler is calculated based on its age and depreciation percentage applied to the manufacturer’s listed selling price.

IDV = Manufacturer’s Listed Selling Price * (100% – Depreciation Percentage)

●       Manufacturer’s Listed Selling Price

MLSP is the price at which a product is officially offered for sale by the manufacturer.

MLSP = Cost Price + Profit Margin

●       Depreciation

With passing time, your two-wheeler ages which means its value will depreciate. Depreciation means wear and tear of the assets (two-wheeler) over time. The IDV takes depreciation into account, and it is calculated based on the following schedule:

The Depreciation schedule of a two-wheeler is as follows:

Vehicle Age Depreciation Percentage
0-6 months 5%
6 months to 1 year 15%
1-2 years 20%
2-3 years 30%
3-4 years 40%
4-5 years 50%

 Importance of IDV in Bike Insurance

IDV carries a similar significance for both policyholders and bike insurance providers. IDV helps to calculate or determine various other aspects of a bike insurance policy. Such as:

  1. It is the basis for claim settlement in case of theft or total loss of the insured bike.
  2. It reflects the current market value of the insured bike.
  3. It helps policyholders understand the level of coverage they will receive in case of a claim.
  4. It helps to calculate premiums as it directly influences the insurance premium.
  5. It prevents policyholders from over or under-insuring their bikes.
  6. Opting for an ideal IDV provides financial security to the bike owner.

 How to Choose an IDV for a Two Wheeler?

Here is the step-by-step guide to choosing the adequate bike insurance IDV for your two-wheeler:

1. Market Value

Consider your bike’s current or market value by considering factors such as the bike’s condition, model, age, etc.

2. Depreciation

Evaluate the depreciation, as it will reduce the bike’s value over time.

3. Coverages and Premium

Choose an IDV value that balances affordable premiums and adequate coverage. Higher IDV means higher coverage and higher premiums and vice versa.

4.  Manufacturing Selling Price

For reference, check the manufacturer’s selling price of the bike since IDV should be close to this value for new bikes.

5.  Add-on Coverages

You can consider the add-on covers for comprehensive protection. It will help protect your bike’s valuable accessories, if any.

6. Evaluate Risk

Assess the risk of theft and accidents in your area and where you will generally travel. As higher the risk, the higher the IDV is preferable.

7. Policy Requirements

Check with your bike insurance company if they have any specific IDV requirements.

8.  Avoid Underinsurance

Avoid choosing a lower IDV, which may lead to inadequate claim settlements during unforeseen events. .

9. Regular Review

Regularly review and update the IDV during policy renewals. It helps you to ensure the appropriate coverage while changing the age of the bike.

10. Talk to Experts

You can also seek expert advice from reputed companies like Tata AIG. They help you select the ideal IDV for your two-wheeler based on your needs.

 IDV and Policy Renewal

During your two-wheeler policy renewal, the IDV will be adjusted based on age and depreciation. As your bike gets older, the IDV decreases, reducing the premium amount.

However, ensure that the IDV remains in sync with the current market value of your bike and does not drop too low to compromise your claim settlements.


IDV is a critical aspect of your two-wheeler insurance policy that directly impacts your coverage and claim settlements.

However, Understanding the significance of an IDV and its implications helps you choose an ideal IDV that syncs with your bike’s current market value.

It will help ensure adequate and comprehensive coverage and offers peace of mind while riding your bike on Indian roads.

Leave a Response