Short answer
IDV is the manufacturer's listed selling price less depreciation by age: 5% up to 6 months, rising to 50% at 4 to 5 years. Over 5 years, or for a discontinued model, the tariff gives no number: the insurer and the insured agree the value.
The schedule
| Vehicle age | Depreciation |
|---|---|
| Up to 6 months | 5% |
| 6 months to 1 year | 15% |
| 1 year to 2 years | 20% |
| 2 years to 3 years | 30% |
| 3 years to 4 years | 40% |
| 4 years to 5 years | 50% |
| Over 5 years, or an obsolete model | No number: agreed between insurer and insured |
A worked example
A car with a listed price of ₹6,00,000, between 2 and 3 years old, takes 30% depreciation: an IDV of ₹4,20,000. The NCB and IDV tool does this for you.
What IDV does
- It is the sum insured for own damage, fixed at the start of each policy period (GR.8).
- The insurer's liability cannot exceed it. IRDAI warns that a cheaper policy may carry a lower IDV, which can reduce what a claim pays.
- A vehicle counts as a constructive total loss when retrieval and repair together exceed 75% of IDV (GR.8).
- Accessories not in the listed price, and a side car, are valued the same way.
Two things people get wrong
This schedule is not for part repairs. The tariff says it applies to total loss claims. Depreciation on parts in a partial loss has a separate schedule, GR.9.
It does not bind insurers today, as far as we can show. The text is the India Motor Tariff, dated 2002. We did not find how insurers apply it now, and IRDAI's current page says only that IDV "should reflect the current market value". Use the schedule as a guide and the insurer's figure as the answer.
Common questions
How is IDV worked out?
The manufacturer's listed selling price, less the depreciation for the vehicle's age, under tariff GR.8.
What is the depreciation on a 3-year-old car?
A vehicle between 2 and 3 years old takes 30%. Over 3 and up to 4 years takes 40%.
What about a vehicle older than 5 years?
The tariff gives no number. The IDV is set by understanding between the insurer and the insured.
Does a lower IDV save money?
It lowers the own-damage premium, and it also lowers what a total loss claim can pay. IRDAI warns about this on its motor page.
Sources
- India Motor Tariff, New India Assurance copy. GR.8 (IDV), GR.27 (NCB) The tariff text, in force from 01-07-2002 by its own preamble. Opened again on 08-11-2026. Nothing here claims it binds any insurer today.
- IRDAI consumer page on motor insurance Official. Opened again on 08-11-2026.
Last checked 08-11-2026. General information for agents, not legal, tax or financial advice. Rules change: the insurer's documents and the regulator's current text decide.
