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What is Insured Declared Value (IDV) in Bike Insurance? How is the IDV Calculated?

Like most individuals, you may know that bike insurance policy gets cheaper with each passing year. But do you understand the reason behind it and how this works? The older your vehicle, the lower the IDV (Insured Declared Value) and your bike insurance premium. Every vehicle loses value due to depreciation over time that impacts your bike’s Insured Declared Value.  


When you purchase your bike insurance policy, IDV is the current market price of your bike. IDV is your bike insurance coverage amount. It is calculated after deducting appropriate depreciation based on the age of the bike. Let us explain the factor of IDV in a bike insurance policy and its calculation.

What is IDV (Insured Declared Value) in Bike Insurance?


IDV is the maximum sum insured under a bike insurance policy offered by the insurance provider. It is the maximum compensation that the insurance company provides to the policyholder in case of misfortune events resulting in damage, theft, or total loss of the bike. In other words, the insurance provider calculates IDV after considering your bike’s listed price by the manufacturer and then the applicable depreciation.

Why is appropriate IDV a critical factor?


As mentioned, the IDV of your bike is the maximum compensation amount that the insurance company offers to cover the damage or loss of your bike. Understated IDV lowers the premium, but you should not fall for lower IDV.

Often individuals fall into the trap of lower premium by reducing the IDV that proves costly during a claim. To file a claim, the IDV of the bike is considered, not its current market price. IDV is the maximum liability against your claim that the insurer bears. Therefore, it is wise to choose the IDV closest to your bike’s market value to expect fair compensation to cover a loss due to theft or any damage to your bike. 

When you compare bike insurance online, avoid overstating the IDV also because this will merely increase your premium. The insurer compensates the policyholder based on the type of loss and not the entire IDV.Thus, compare bike insurance policy with appropriate IDV to make an informed decision. 

The calculation of IDV

To determine the IDV for bike insurance, the insurer deducts applicable depreciation from your bike’s market value.

  • IDV = Manufacturer’s Price – Cost of Depreciation
  • With additional accessories, IDV = (Manufacturer’s Selling Price – Cost of Depreciation) + (Cost of accessories – Cost of Depreciation of additional accessories).

The specified deductible depreciation rate for five years is as follows – 

Age of your bike

Applicable depreciation rate


Up to 6 months



Between 6 months – 1 year



Between 1-2 years



Between 2-3 years



Between 3-4 years



Between 4-5 years



Above 5 years



If the bike is older than five years, the IDV is set by a mutual agreement between the policy proposer and the insurance provider.


Let’s say the cost of the bike you bought 3 years ago was Rs. 8 lakhs. Based on the age of the bike (3 years), applicable depreciation is 30%. At present, the market price of your bike is Rs. 8.5 lakhs. Then, IDV = Rs. 8.5 lakhs – 30% of Rs. 8.5 lakhs = Rs. 5.95 lakhs.

Factors Affecting IDV in Bike Insurance

Some important factors that affect the IDV of the bike to be insured are as follows:

  • Age of the bike 

The more the bike ages, its depreciation increases and lowers the IDV. 

  • MMV (Make, Model, and Variant) of the bike

Different bikes’ prices differ, so MMV affects the IDV of your bike insurance. 

  • Registration date

Insurance costs vary for every new year, so the vehicle’s registration date is considered.

  • Additional Accessories

Added accessories to your bike that are not fitted by the manufacturer would increase its IDV as these accessories also depreciate with time.

  • Location of registration 

The city where you live also affects IDV due to slight differences in insurance costs in different states.

  • Underwriting terms of the insurer

Different insurance companies offer different IDV values for your bike because of the different underwriting terms of the insurance company. Some insurers may offer you a higher IDV; therefore, compare bike insurance online before buying.

Thus, IDV is an important deciding factor for your bike insurance premium. Both understated and overstated IDVs should be avoided. To find the best insurance providers that offer the highest IDV, compare bike insurance online at your pace. 



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