What is IDV in car insurance and how is it calculated?
IDV is the most your insurer pays if your car is stolen or written off. Learn how it is calculated, how it affects your premium and how to pick it.
By TommyAndFurry advisory teamReviewed by [REVIEWER NAME, QUALIFICATION]Updated 3 min read
In short
- IDV (Insured Declared Value) is the current value of your vehicle as agreed in your policy, and the most the insurer pays if it is stolen or declared a total loss.
- IDV is the manufacturer's listed selling price minus depreciation for the vehicle's age, plus the depreciated value of fitted accessories.
- A higher IDV means a higher own-damage premium and a bigger payout on total loss; a lower IDV cuts the premium but leaves you under-insured.
- IDV does not change the third-party premium, which depends on engine capacity.
What IDV means
Insured Declared Value (IDV) is the value of your car that you and the insurer agree on when the policy starts. If the car is stolen, or damaged so badly that repairs would cost more than a set share of its value (a total loss), the insurer pays up to the IDV, less any deductibles.
For smaller claims, IDV sets the ceiling on what the insurer pays for own damage. It is not the resale price you might get from a buyer.
How IDV is calculated
IDV starts from the manufacturer's listed selling price of your make and model (the ex-showroom price), then deducts depreciation for the car's age. Registration and insurance costs are not included. Fitted accessories that are not part of the listed price are added at their own depreciated value.
| Age of the vehicle | Depreciation |
|---|---|
| Under 6 months | 5% |
| 6 months – 1 year | 15% |
| 1 – 2 years | 20% |
| 2 – 3 years | 30% |
| 3 – 4 years | 40% |
| 4 – 5 years | 50% |
| Over 5 years | Agreed between you and the insurer |
For cars more than five years old, or models no longer made, IDV is agreed between you and the insurer, often based on the car's condition and market value. You can estimate your own with our IDV calculator.
How IDV affects your premium
- Higher IDV: a higher own-damage premium, and a bigger payout if the car is stolen or written off.
- Lower IDV: a lower premium, but you may get far less than the car is worth after a total loss.
- Third-party premium: not affected, because it depends on engine capacity.
Choosing the right IDV
Insurers let you pick an IDV within a range. Choosing the lowest possible figure to save on premium is a common mistake: the saving is usually small compared with what you lose on a theft claim. Pick an IDV close to the car's real current value, and check it again at every renewal, because it goes down each year.
When you compare car insurance quotes, check that every quote uses a similar IDV. A cheaper premium with a much lower IDV is not a like-for-like saving.
Questions readers ask
Does IDV affect my third-party premium?
No. Third-party premiums are notified by the government and the regulator and depend on the engine capacity of the vehicle, not its IDV.
Can I choose any IDV I like?
You can choose within the range the insurer allows for your vehicle's make, model and age. Going too low leaves you under-insured.
Why does my IDV go down every year?
Because the depreciation for your vehicle's age increases, so the value the insurer covers falls. Check the IDV each time you renew.
This guide is general information, not advice for your situation. Cover, exclusions and claim terms differ by insurer and plan, so always read the policy wording before you buy. Insurance is the subject matter of solicitation. For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale.
