Jasmine Birtles
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How to Use an IDV Calculator Before Buying Car Insurance
Moneymagpie Team
2nd Jul 2025
Knowing how to use an IDV calculator before you buy car insurance can literally make a world of a difference, not only to the cost of your policy but also to what you might be left with if your car is stolen or written off. Though most buyers only bury their heads in premiums, the Insured Declared Value (IDV) subtly describes the actual value of your cover. Let’s break it down so you can determine what your car is worth and get an insurance policy that actually covers your needs when something happens.
- What is IDV and Why Does It Matter?
- Where the IDV Calculator Comes In?
- How Depreciation Affects Your IDV?
- Things to Keep in Mind While Using an IDV Calculator
- Ideal Time to Use an IDV Calculator?
- Final Thoughts
What is IDV and Why Does It Matter?
IDV is known as Insured Declared Value. It’s essentially the highest amount your insurer will pay out if your car is stolen or damaged and cannot be repaired. In short, it’s the market value of your car minus how much it has depreciated. Your premium, as well as the claim amount, are affected directly by the IDV.
| Component | Description |
| Market Value | Current value of your vehicle in the market |
| Depreciation | Reduction in value over time and use |
| Final IDV | Market Value – Depreciation |
By accurately calculating your car’s IDV, you ensure that you are not underinsured or overpaying on premiums.
Where the IDV Calculator Comes In?
Before purchasing a new car insurance policy, an IDV calculator helps estimate the correct value of your vehicle. It’s available on nearly every insurer’s website and insurance comparison platform.
Key Inputs You’ll Need:
- Make and model of the car
- Year of manufacture
- City of registration
- Variant (e.g., petrol/diesel, manual/automatic)
- Vehicle registration number (optional but useful)
Once these details are entered, the IDV calculator will instantly provide a realistic IDV figure that aligns with market standards.
How Depreciation Affects Your IDV?
Depreciation is the main factor reducing your car’s value annually. It’s calculated as per standard rates provided by the insurance regulator.
| Age of Vehicle | Depreciation Rate |
| Up to 6 months | 5% |
| 6 months – 1 year | 15% |
| 1 – 2 years | 20% |
| 2 – 3 years | 30% |
| 3 – 4 years | 40% |
| 4 – 5 years | 50% |
| Above 5 years | Based on mutual agreement |
Things to Keep in Mind While Using an IDV Calculator
Using an IDV calculator is easy, but you need to stay alert to ensure the figures make sense:
Watch Out For:
- Pre-filled or inflated values from insurers
- Hidden adjustments in base price
- Lowered IDV to reduce premium (not ideal for claims)
| Mistake | Consequence |
| Choosing Lowest IDV | Lower premium, but insufficient claim |
| Choosing Highest IDV | Higher premium, but might not match true value |
| Ignoring Add-ons | Engine protect and zero depreciation affect the overall claim value |
Choose an IDV that is an accurate estimate of your car’s market value and not the one that helps you avail a price that is lower than the others.
Ideal Time to Use an IDV Calculator?
Timing matters when it comes to using these tools effectively. Here is how to make the best use of IDV calculator:
| When to Use | Why |
| While Buying a New Policy | Get optimal coverage from the start |
| During Renewal | Ensure the value is still accurate post-depreciation |
| After Modifications | Upgraded cars may need updated IDV |
| When Porting Policy | Compare if the new insurer offers better valuation |
Final Thoughts
A wise driver is one who plans ahead. So, by utilising an IDV calculator even before buying your car insurance policy, you’re preparing yourself and arming yourself with the right information to strike a balance between premium and protection. Cross-check the IDV provided, alter it if your insurer permits, but make sure to sync it with the prevailing market price of your car.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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