Accounting and finance

Understanding the role of IDV in Vehicle Insurance: Why It Matters

Having vehicle insurance for a vehicle keeps the car protected against unforeseen occurrences in the forthcoming months or years. So, when it comes to car insurance renewal or purchase, you are required to pay a premium to your insurance provider. You may be excited to discover the offers on various car insurance policies like Kotak car insurance online. Visit the official website & learn further about insurance policies.

Coming back to the discussion, some policyholders compare premiums across different insurers. That’s great, but amidst your surveys, you need to be careful about choosing a premium. Insurers might quote a low premium while keeping the IDV of the vehicle low. Now, what do you mean by IDV, and how does it matter?

An Introduction to Insured Declared Value: How Is It Important?

IDV, aka Insured Declared Value, is the total amount insured at the car insurance’s beginning. The policyholder gets the maximum amount when they file a claim under the insurance policy. In simple words, an IDV is the car’s latest market worth.

For instance, let’s say that your four-wheeler is stolen or damaged to a point when a repair is not possible. In such a case, the insurance provider determines the overall value of the four-wheeler insurance claim depending on the IDV. You might be wondering why it is important in any four-wheeler insurance. Get an insight into the following points to understand their importance.

The Role of IDV in a Car Insurance Policy

IDV is the total sum insured in a car policy. It is the total amount for which your vehicle is insured. In short, it forms the basis of the settlements if your car is severely damaged or stolen in the accident.

Different brokers, insurance aggregators, and agents may provide you with varied quotes. So, while renewing car insurance, you must evaluate them carefully to opt for the lowest quoted premium. Here’s an overview of the role of IDV in the vehicle insurance policy:

Determines the overall coverage

IDV evaluates the overall coverage, so it can also determine the premium quote for vehicle insurance. The higher the IDV, the more will be the coverage (alongside a more significant premium amount). With a lower IDV, there will be low premiums.

Beneficial When the Car Sustains Damage

Suppose your car sustains damage. In such a circumstance, the insurance provider estimates the costs. While acquiring that policy, they may disburse the amount depending on the damage and IDV. So, they can pay the whole IDV even when the total loss is more than 70%.

Note that a higher IDV will have a greater risk since the four-wheeler has a high market value.

At times, an agreement takes place between the insured and the insurance provider to undervalue the car. So, the IDV for the four-wheeler insurance will be reduced. The insured individual then agrees to pay the low rates when the insurance provider offers insurance.

Summing up

Now that you have discovered the role of IDV in vehicle insurance, you can get an insight into Kotak Car Insurance online.

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