IDV is the ‘actual’ value of your car as far as your insurer is concerned at any given moment. This is the highest amount of money that your insurance firm will provide to you in the event of car theft or total loss of your car. This is not what you actually bid for the car but the current market price of the car taking into account depreciation.
1. The Foundation of Your Claim: IDV is the cost under which your car insurance policy will begin and will continue to increase as the car depreciates. In cases of complete write-off or theft of your car, the agreed IDV is the amount that the insurance company will offer to you. If this is set too low, then you will find that you had inadequate coverage, whereas if the deductible is set too high, then you will find that you paid a lot of money in premium for nothing much in return.