What Is IDV In Bike/Two Wheeler Insurance and Why Is It So Critical?


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If you use a two-wheeler and you are looking at buying an insurance for the same, you must know all about what is IDV in two wheeler and bike insurance and its importance while buying a two-wheeler insurance.

The IDV meaning in terms of bike insurance is the pre-decided amount assured to be paid by the insurance company. This amount is likely to reimburse the owner of the policy to protect him/her against the damage caused by accidents, theft, and so on. In common language the IDV in an insurance simply means the value of your two-wheeler in the market at present. Thus, what IDV in insurance means is the maximum amount that you can claim from your insurance agency if your two-wheeler gets damaged.

How to Calculate IDV Value for Two-Wheelers or Bike

The calculator used to compute IDV in insurance is a very handy and time-efficient online app. As the IDV depends on the selling price of the two-wheeler listed by the manufacturer, it is projected during the time when you buy the policy or when you renew the policy. Later, the IDV is adjusted for depreciation by determining its value in the market as well as by the premium that you are paying to the insurance company.

IDV generally excludes insurance and registration charges. For calculating personally fitted accessories by the two-wheeler owner, you need to calculate the IDV separately by paying an extra cost.

Further, you can also determine the precise claim amount in case of damage or when your two-wheeler gets stolen with the help of an bike IDV calculator.

Rate of Bike Depreciation in India

  • The depreciation rate for two-wheelers not more than 6 months old is 5%.
  • For two-wheelers that are more than 6 months old but less than 1 year old, the rate is 15%.
  • For bikes that are over 1 year old but less than 2 years, the rate is 20%
  • For the ones that are as old as 2 years and above but less than 3 years old, the rate is 30%
  • Likewise, if the bike is over 3 years old but less than 4 years old, the rate of depreciation is 40%
  • And for two-wheelers that are over 4 years old but less than 5 years old, the depreciation rate is 50%

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Aspects that affect IDV in Bike Insurance

The IDV in two wheeler valuation depends on the below factors:

  • On how old the bike to be insured is?
  • On the registration date of the bike
  • On the city where the two-wheeler is insured
  • On the fuel type
  • On the model and make of the bike, and
  • On the policy term of your bike insurance

How to Calculate IDV for Bike More than 5 Years Old

The depreciation value of a bike depends on its age. In fact, the depreciation value and the age of the bike are said to be directly comparative. So, the older the bike is, the more the rate of depreciation, which means the older the bike is, the less value it will fetch.

If your bike is more than 5 years old, the value of its depreciation will be calculated depending on the condition of the bike and its various parts. If the parts of the bike are made up of different materials, the IDV would be rated thus. Moreover, the overall average of the bike also determines its IDV in insurance.

If your two-wheeler is an outdated model and is more than 5 years old, the IDV could be calculated as per the mutual contract between the insurance provider and owner of the policy. Also, in certain cases, the insurance company can take the help of surveyors to calculate IDV. In this case also, the cost becomes higher.

Importance of IDV in Two-Wheeler Insurance Policy

It is important to know what IDV is in bike insurance because it calculates the amount assured to be paid by the insurance company to the policy holder of two-wheelers. It comes handy in case of theft or accidental damage of a two-wheeler. Thus, it is important to have a balanced IDV.

If your IDV is close to the market value of your bike, you are sure enough to get enough compensation in case of theft or any major damage caused to your bike.

At times IDV is calculated low (as low as 5 to 10%) to make the premium amount less. This is done as per the choice of the insurance owner. However, in this case the insurance agency considers the age of the bike when the insurance owner files a claim.

What Happens if You Declare Wrong IDV for Bike?

It is important to declare the correct IDV for your bike. Declaring an IDV lower than the market value would get you into huge loss as you will receive a claim amount lower than what you should get. You might be able to save a small amount on the premium by stating a lower IDV, but in the long run it doesn’t make much sense.

Similarly, declaring a higher IDV is also not suggested as you will receive a lower claim by quoting higher IDV. This is because when your two-wheeler insurance gets processed, the insurance agency considers the age of the bike and the depreciation of the bike depends on the same.

If you declare the exact IDV, you can get a maximum amount of insurance claim on your two wheeler valuation in case of theft of your bike or any major damage.


From the above, we can conclude that IDV is one of the most important aspects while calculating the premium to be paid for your two-wheeler. Since a greater IDV draws greater premium rate and likewise a lower IDV attracts a lower premium rate, it is better to maintain a steady IDV while evaluating quotes and to choose the best policy for your bike.
Opting for the right insurance plan with correct IDV for your bike valuation is important and helps in successful insurance claims for your bike/two-wheeler.

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Jan 28, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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