IDV Or Insured Declared Value

As a driver in Malaysia, you very likely understand the gravity of having insurance. Setting aside the fact that it is a mandated requirement by law, if you want to use your vehicle in the country, it provides a certain level of financial security you can’t afford to do without in today’s world. As such, understanding all that goes into your car insurance policy is very important. When you take out an insurance policy on your automobile, you are expected to pay a premium. Several factors determine what amount you pay as your insurance premium. One of these variables is Insured Declared Value or IDV.

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What Exactly Is Insured Declared Value?

Basically, the IDV (Insured Declared Value) of your vehicle is the estimated current market value of the automobile you took out insurance on. As a driver, you know that occurrences like vehicle breakdowns, repairs and even accidents are a part of owning and operating an automobile. In some extreme cases, your vehicle could even end up stolen or vandalized beyond repair. When these accidents occur within the parameters of your insurance policy, the amount stipulated as your IDV is what you can expect as a payout. For example, if at the start of your insurance policy, your IDV was established to be 10, 000 MYR, should your car get stolen or damaged beyond repair, your payout or compensation will be exactly 10, 000 MYR.

Why Is IDV Important Yo You?

The value of your IDV has a direct bearing on what you pay as insurance. Broadly speaking, most insurance companies will require you pay nothing less than 2 – 3% of what your IDV is valued at as your premium. In essence, the higher your IDV, the more you pay as premium. While this might tempt some drivers to declare a slightly lower IDV to save on premiums, note that should the worst happen, you may not receive up to what you should’ve as compensation. For this reason, it is important you keep your IDV as close to the real market value of your vehicle as possible.

How Do You Calculate The Insured Declared Value For Your Vehicle?

The Insured Declared Value of your vehicle is calculated using various parameters which are then calibrated against the current motor tariffs in the country. Some data used by insurance companies to evaluate your IDV include but aren’t limited to:

1. Your car registration information
2. The location where you carried out your car registration
3. The make, model and manufacturer of the automobile insured
4. The current description of your vehicle.

All things being equal, the older your vehicle gets, the lower you can expect your premium to become.

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Key Takeaways

The first and perhaps most important thing to note is that if you want to enjoy the full benefits of your IDV, never under-state the value of your IDV under any circumstance. In the same vein, do not overstate your IDV as this may be counterproductive for you in the end. Lastly, when making claims on your IDV, keep in mind that the way you lose your automobile also factors into your payout. If the manner in which you lost your car isn’t covered under your policy, getting compensation may prove challenging.