Planning to sell or buy a secondhand two-wheeler but need clarification on the vehicle’s depreciation value? Know the specifics of your two-depreciation wheeler’s value.
What is depreciation?
Depreciation is the continuous loss of an asset’s value. Depreciation is the term used to describe how your bike loses value in time due to normal wear and tear. It assists the insurer in figuring out the current market value of your bike when you buy bike insurance online or offline.
Two-wheelers, like any other vehicle, experience wear and tear throughout their existence, which lowers their market value over time. The suppliers of two-wheeler insurance policies provide a comprehensive list of depreciation rates (per the Indian Motor Tariff) for various points in the two-lifecycle. wheeler’s
Depreciation is the primary aspect that helps determine the bike insurance price of the premium and the insured declared value (IDV). *
Understand insured declared value (IDV):
IDV is essential in determining the significant amount promised if your two-wheeler is stolen or damaged. The IDV, is the highest amount the insurance company will pay in case of a two-wheeler casualty, theft, or damage*. IDV is simply the two-current wheeler’s market value, you can calculate your IDV using a two wheeler insurance premium calculator.
If your two-wheeler is involved in any mishap, the bike insurance online or offline provider will compensate you with the IDV. As your two-wheeler gets older, this compensation decreases. The IDV directly affects your bike insurance price.*
How are insured declared values (IDV) determined?
The original price of your bike does not determine the IDV. Instead, it may be determined using the two-market wheeler’s value when the policy began. This value changes significantly over time.
To receive an ideal IDV, you should insure your bike as soon as you buy it.
Formula to calculate the insured declared value (idv):
The insured stated value (IDV) equals the bike’s current market value minus depreciation costs plus accessory costs minus accessory depreciation value.
| Vehicle’s lifetime | Percentage of depreciation |
| Six months or less | 5% |
| Exceeding six months & less than a year | 15% |
| Higher than one but shorter than two years | 20% |
| Greater than two but less than three years | 30% |
| Greater than three but lower than four years | 40% |
| greater than four & less than five years | 50% |
According to the Indian motor tariff act, the bike will lose value as follows:
Depending on the state of your two-body wheeler’s parts and its serviceability, you may still receive the IDV amount if it is five years old or older. Even if your two-wheeler is an older model, you can still obtain its IDV by reaching an agreement with your bike insurance online or offline provider*. The insured stated motorcycle’s value could also be determined using an IDV calculator.
IDV is figured out depending on the agreement amid the insurance company and the insured person for vehicle older than five years and for models the manufacturer no longer makes.
For Total Loss (TL) and Constructive Total Loss (CTL) claims, IDV shall be treated as the “Market Value” throughout the policy year as specified in the policy without any further depreciation.
* Standard T&C Apply
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘
