Team-BHP - Increasing your Car's IDV during insurance renewal -Whats your take?

Its time again for me to renew my car insurance.
Yes there are a lot of players in the market but some how I have been with ICICI Lomabard for the last 4 years. Never even had a thought of changing the car insurance from ICICI to someother insurance company.
After seeing Sam's thread on TATA AIG, it was time for me to find out on different options available in ICICI. Though ICICI does not offer 0% depreciation or the add ons as TATA, they have suggested me that they can raise the IDV by 50% of what they currentlt have quoted for the insurance renewal.
Accoring to ICICI 4-5 year old car will depreciate by 50%. So they have quoted 4.5 lacs for my car but they can go till 7 lacs if I pay a higher premium accordingly. They have even confirmed that in-case of any mishap they will pay upto 7lacs and not the earlier original quote since I have paid more premium.
My question is
1) HAs anyone done this IDV increase?
2) Will they really cough upto 7 lacs as they claim?
3) Does the IDV caluclation change from companies to companies( TATA AIG's 0% depreciation is only for first 3 years)
4) Should I go ahead with the increase in IDV value?

IDV cannot be increased more than 10% of the previous IDV, others pls correct me if am wrong. Do not increase IDV more than the present market value of your vehicle. Insurance companies always look into their own rule books and then decide the compensation, hence increasing IDV more than 50% is not recommended.

I have my vehicle insurance with TATA AIG, at the time of 2nd renewal i tried to increase the IDV and the advisor provided the above info.

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Originally Posted by VMC (Post 2196328)

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Originally Posted by santhoshs (Post 2196475)

What the insurance guy says is that since they have charged a higher premium for the increase in IDV they will also release money as per the IDV. I tried to verify this from a friend in ICICI and he also says the same.

IDV is normally fixed on basis of the manufacturers listed selling price of the brand/model at the commencement of the Insurance year and adjusted for depreciation as per the schedule according to the Motor Act. This IDV is normally fixed for Total loss/Contructive total loss purposes only.

If the Insurer is offering you a higher IDV at a higher premium, then it is an understanding between you and the Insurer and will be treated as the market value throughout the policy period. If you are comfortable in paying an extra premium, then thats your call. But its possible to go for an higher IDV. Please reconfirm with the Insurers since in your case this would be the fifth year on Insurance.

This is interestng. The IDV would come into picture only if it is a total loss. Now let's take the case that you mentioned of Sam. He had a bill of 1.2 lakh. Now irrespective of his IDV, the repair of cost 1.2L. His insurance company paid him the total because he had a no depreciation rider. If instead of that, he had a higher IDV, then he probably might have had to fork out around 30,000 from his pocket for the repair. So for your needs, I don't think an increased IDV is required.

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Originally Posted by rajakumar (Post 2196517)

I am not a pro in insurance, but I believe that IDV comes into picture only when the car is totaled and insurance will pay back the IDV value of the car. In case of minor accidents, still the deprecation and clauses count.

agree:

IDV only comes into picture during total loss situation. This was told to me by my insurance advisor. Increasing the IDV will not help in reducing expenditure from your own pocket in case of minor insurance claims.

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Originally Posted by ghodlur (Post 2196506)

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Originally Posted by VMC (Post 2196487)

This leaves the door wide open for thieves. Say, I have a car (e.g. Petrol Mahindra Scorpio) that suffers from disastrous resale. I'll insure it at a higher IDV and ensure its stolen / totalled. The insurance cos are smarter than that.

A difference of 3 - 5% is understandable. However, if someone says they'll give you a 50% higher IDV, I smell a rat.

Quote:

Originally Posted by GTO (Post 2196770)

From nearly all the theft / total loss claims that I've seen, the insurance company will pay you in accordance with their own depreciation chart. They have a fixed depreciation scale which is strictly adhered to at the time of reimbursement.

Ghodlur is spot-on with his post:

This is what my understanding was..becuause the insurance players are very happy when they get money and very stingy when they have to release the amount.

This leaves the door wide open for thieves. Say, I have a car (e.g. Petrol Mahindra Scorpio) that suffers from disastrous resale. I'll insure it at a higher IDV and ensure its stolen / totalled. The insurance cos are smarter than that.

A difference of 3 - 5% is understandable. However, if someone says they'll give you a 50% higher IDV, I smell a rat.

Valid Point GTO...I never thought about this...
This is becoming interesting actually...Let me talk to the guys in ICICI again and try to get them to show the in writing the terms that dictate while reimbursement

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Originally Posted by kaushikr (Post 2196548)

Yes I agree with you point.
Lets think from an another angle. I am looking at the worst option when the car is treated as junk and then IDV comes to picture. Thats where insurance plays a major role. According to the calculation give to me an extra 2000rs results in 2lakhs higher IDV.

Looks like I have to go against increasing the IDV.

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Isn't he fooling you?

IDV is value of vehicle when it is insured. Since you are not getting 0% depreciation, there will be depreciation amount from time of insurance effective to insurance claim launched. This depreciation % is like more older vehicles. What your insurance agent isn't telling you is what you get effectively.

Hence even if you increase the IDV in case of total loss or theft, you still get depreciated amount. So hear you would be getting another peanut amount for hoping premium. Am I wrong here?

Quote:

Originally Posted by VMC (Post 2197192)

VMC, while hunting around for best premiums during my insurance renewal, based on the online quotes received from various insurers, my IDV was varying by upto 40,000 rupees. This, for a car costing 5.4L (ex showroom) and in its fifth year of insurance renewal. The insurance premiums varied accordingly.

So, my guess is that the variation in IDV will depend on the price of the vehicle and should be around 3-5% as mentioned by GTO.

Cheers.