In common terms, the Insured Declared Value also is known as IDV of the vehicle and is the current valuation of your vehicle in the market. This is the maximum amount of compensation you can claim from the insurance company in the event of complete loss of vehicle due to theft or any other accident. This plays an important role in determining the premium paid for the insurance policy as the higher IDV means that premium charged is more for the car insurance policy. In order to get a clear understanding of various aspects of IDV, you can approach motor insurance in Dubai providers as they have good experience in this industry.
Factors that Decide IDV of Vehicle
- There are many factors that affect the IDV of any vehicle. The first thing that is taken into consideration is the overall size of the vehicle. In this regard, the small-sized cars and large-sized cars come under different categories.
- Apart from that, the showroom price of the car is also taken into consideration along with the age of the car.
- When the car is new, complete coverage is given to it and this comes as the showroom value of the car. However, only certain components like glass, rubber, and plastic are covered and the standard depreciation factor is applied before choosing the value of the car.
- Other than that, the age of the car also matters a lot as the old vehicles undergo standard depreciation. This means that you get less value for your car as it ages.
- The previous track record of the vehicle is also considered. Moreover, even a new vehicle may have less IDV, if it has made a few claims due to accident or other damages in the past.
- The insurers also consider different features of the car and also notice car’s manufacturer along with other aspects before finalizing the IDV for the vehicle.
How IDV Affects the Premium of Car Insurance Policy?
The premium paid for the car insurance policy is directly proportional to the IDV of the vehicle. In simple terms, higher IDV vehicles have more premium and the vehicles with lesser IDV usually have small premium rates. You also have to consider the depreciation factor to understand the proper relationship between IDV and premium paid for the policy. Remember that your vehicle starts losing its value as it ages
Why Insurance Premium Goes Up Even as Car Loses Value?
- There are many reasons for this common complaint and you should understand them carefully while buying motor insurance in Dubai for your vehicle.
- To begin with, you need to understand that it costs the same amount of money to repair an old vehicle as it takes to repair a new vehicle.
- In fact, if you consider it that way, repairing old vehicles may cost more as you may not get the required spare parts and they may also be expensive in the market.
- This leads to increased repair costs whereas you can readily get spare parts for new models in the market.
- Apart from that, the chances of an old vehicle going for repairs are more than the new ones. It is for this reason that the insurance companies charge a higher premium to cover old vehicles.
Simple Tips to Reduce Premium for Car Insurance
You can easily reduce the premium amount for your car insurance policy when you follow these simple guidelines:
- Remember that the car insurance companies always reward safe driving and you can be charged less premium when you have not made any claims for the previous year. You can talk to motor insurance in Dubai service providers to know about the best deals for your vehicle.
- In this way, if you continue to drive safely and have no claims for many years, you can expect a significant reduction in premium rates for your insurance policy as ‘No Claim’ bonus or discount.
- Installing safety gadgets for your vehicle like anti-theft locks and airbags can help you to reduce the premium by some margin.
- You can discuss such plans with car insurance in UAE service providers and get the best deal for your car.
Wrapping it Up!
In this manner, you can get complete details about IDV and other aspects related to the premium of the policy when you meet the executives of motor insurance in Dubai. They will guide you properly to choose the right policy suited for your vehicle based on all these factors. In this way, you can rest assured that you will get the best value for your money in the long run.