IDV Guides

High IDV vs Low IDV: Which Should You Choose?

By  Updated  3 min read
High IDV vs Low IDV: Which Should You Choose?
In this guide

Key takeaways

  • IDV affects only the own-damage part of your premium; third-party, PA cover and flat add-ons do not change.
  • In a typical example, each ₹1 lakh of IDV adds roughly ₹1,000–₹2,000 a year to the premium — but changes a theft or total-loss payout by the full ₹1 lakh.
  • A low IDV also lowers the repair cost at which your vehicle becomes a constructive total loss.
  • The right IDV is close to the schedule value or, for older vehicles, the real resale value.

When you renew, most insurers let you slide the IDV up or down. Lowering it shaves a few hundred rupees off the premium. Raising it costs a little more. Which is smarter? The answer depends on how much each rupee of premium buys.

What changes when you change IDV

Higher IDV Lower IDV
Own-damage premium Higher Lower
Third-party premium No change No change
Payout on theft or total loss Higher Lower
Payout on ordinary repairs Usually no change Usually no change
Repair cost at which the car is a constructive total loss (75% of IDV) Higher Lower
NCB discount in rupees Slightly higher Slightly lower

How much does each lakh of IDV cost?

Take a five-year-old-or-newer car with a 1001–1500cc engine registered outside the eight Zone A metros, 25% NCB and an insurer pricing own-damage cover at half the old tariff rate. Using our premium estimator without add-ons:

IDV chosen IDV Total premium (incl. GST)
10% lower ₹5,04,000 ₹11,537
Schedule IDV ₹5,60,000 ₹12,328
10% higher ₹6,16,000 ₹13,118

Cutting the IDV by ₹56,000 saves about ₹790 a year — roughly ₹1,400 per lakh of cover. If the car is stolen, the payout is ₹56,000 lower. You would need about 70 years of savings to cover that one shortfall. Add-ons priced as a percentage of IDV, such as zero-dep, make the saving a little larger, but the conclusion rarely changes.

The constructive total loss effect

A vehicle is treated as a constructive total loss when the cost of retrieval and repair exceeds 75% of the IDV. With an IDV of ₹5,60,000 that threshold is ₹4,20,000; with ₹5,04,000 it is ₹3,78,000. A lower IDV therefore makes it more likely that a serious accident ends in a total-loss settlement at that lower IDV, instead of a repair.

Is a high IDV ever a bad idea?

An IDV far above the vehicle’s real value costs extra premium without real benefit for repair claims, and insurers generally won’t accept a figure much above their system value. Within the band an insurer allows, a slightly higher IDV is reasonable if your variant holds its resale value well or you added declared accessories.

When a lower IDV can make sense

  • The vehicle is older than five years and its genuine resale value is below the insurer’s proposed figure.
  • The vehicle has been modified or has wear that would reduce its market value, and you would rather not pay for value that isn’t there.

In both cases the aim is accuracy, not a cheaper-looking quote.

How to choose

  1. Find the schedule IDV with our car or bike calculator.
  2. Ask each insurer for a quote at or near that IDV, with the same add-ons and NCB.
  3. Compare quotes on premium per lakh of cover using the IDV vs premium tool.

FAQs

Does a higher IDV increase my claim for a dent or scratch?

No. Partial-loss claims are paid on the actual repair cost, less depreciation on parts and deductibles. IDV only sets the ceiling.

Can I lower IDV to reduce third-party premium?

No. Third-party premium depends on engine capacity (or motor power for EVs) and is fixed by the Government.

My financier insists on a certain IDV. Why?

If the vehicle is on loan, a total-loss or theft payout goes first to the lender. A realistic IDV protects both you and the lender from a shortfall.

Sources

  • Premium figures computed with the idvcalculator.com premium estimator using India Motor Tariff reference rates, a 50% insurer discount, 25% NCB, ₹330 PA cover, Government-notified third-party premium and 18% GST.
  • Constructive total loss definition in standard private car policy wordings.

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