<div><em>At the time of renewal, for quoting a low premium, the insured declared value (IDV) of the car may be kept deliberately low by distributors. <strong>Sunil Dhawan</strong> explains what to take note of </em></div><div> </div><div>At times, there could be big difference in the premium on your car insurance policy. If different agents, brokers and insurance aggregators are providing varied quotes, its time to take notice.</div><div> </div><div>Your car insurance policy covers two risks – risk associated with own damage (OD) and secondly the third-party risk. While the third-party tariff is mandated by law, the OD risk premium depends on the Insured's Declared Value (IDV). Therefore, when you get your car insured for the first time or at the time of renewal, IDV plays an important role. </div><div> </div><div>In a vehicle's insurance policy, the sum for which the vehicle is insured is called IDV. The IDV of the vehicle is the sum insured for which the car gets insured and it forms the basis of settlement for all purposes such as if the vehicle is stolen or is damaged beyond repair in an accident. </div><div> </div><div><img alt="" src="http://bw-image.s3.amazonaws.com/age-of-vehicles-lrg.jpg" style="width: 640px; height: 162px; margin: 1px;"><br><br>Initially, when the car is bought, the IDV is determined based on the manufacturer's listed selling price of the brand and model of the vehicle. For this, the price listed by the car's manufacturer at the time of issuing the policy, or the time of renewing it, is considered. Over the years, especially during renewals, the price is adjusted based on depreciation of the vehicle. <br> </div><div>During renewals, one may get the car insured for a low IDV, thus bringing the premium lower. However, in doing so, one is exposed to high risk. Get insurance on a full IDV as this is the amount that the insurer would pay if your car got completely damaged or stolen. At times, insurers and their agents too quote a lower premium but at a lower IDV. So, ask for the exact IDV and insure for full IDV. <br> </div><div>When you buy a policy directly from the company, the chances of getting a wrong IDV are negligible. IDV is based on the age of your vehicle, its engine capacity and location of the car. But when you buy the cover from an agent or a broker, it is advisable that you cross check the IDV, either through a renewal receipt from the insurer, or online by filling in the required details.</div><div> </div>
