No, you should not reduce the IDV of your car automatically every year just to lower the renewal premium. IDV normally comes down as the vehicle gets older because its value depreciates over time. However, the amount should still reasonably reflect the car’s current value. 

Choosing an unnecessarily low IDV may reduce the insured amount available in case of theft or total loss. That is why it is important to check the IDV carefully at every renewal.

First, Understand What IDV Actually Represents

Insured Declared Value, or IDV, is broadly the value assigned to your car for insurance purposes after accounting for depreciation. It is particularly relevant to own damage cover because it sets the maximum amount payable for the vehicle in a covered total loss or theft claim, subject to the policy terms.

When taking new car insurance, the value starts relatively close to the vehicle’s applicable listed value. As the car ages, depreciation gradually reduces its value. That is why the IDV shown at future renewals will usually be lower.

A Lower IDV Is Normal, But It Should Still Make Sense

There is an important difference between IDV reducing naturally and deliberately setting it too low. Cars depreciate with age. Therefore, an IDV that remained unchanged year after year would generally not reflect the vehicle’s changing value.

At the same time, reducing the figure more than reasonably required may leave you with less financial support in a major claim. The objective is not to keep the IDV as high as possible or push it as low as possible. It should remain reasonably aligned with the car’s current value.

Why Choosing the Lowest IDV Can Be a Problem

A lower IDV may reduce the own damage component of the premium because IDV is one of the factors considered while calculating it. That saving should not be viewed separately from the coverage you receive.

Suppose the car is stolen and cannot be recovered, or it suffers damage severe enough to be treated as a total loss. The policy settlement is linked to the IDV, subject to applicable terms, deductibles and claim assessment.

What Should You Check at Renewal?

Instead of automatically accepting or reducing the IDV, look at the figure in context. 

A simple renewal check can include:

• Your car’s age and model
• Its present market value
• The IDV offered in the renewal quote
• The difference between available IDV options
• How a change in IDV affects the own damage premium
• Any accessories that have been separately declared or insured

This gives you a clearer view of what you are paying for and how much value is being assigned to your vehicle.

Does IDV Need to Drop by the Same Amount Every Year?

Not necessarily. IDV is linked to depreciation and vehicle value, so the change may not look identical at every renewal. Standard motor policy wording has traditionally used age-based depreciation when fixing IDV during the early years of a vehicle.

For older vehicles, valuation may require agreement or assessment according to the applicable policy and insurer’s process. For this reason, avoid assuming that a fixed amount should simply reduce last year’s IDV. Check the renewal figure on its own merits.

Higher IDV vs Lower IDV

A quick comparison can help you understand how different IDV choices may affect your premium and coverage.

The final IDV offered and accepted remains subject to the policy conditions and the insurer’s permitted valuation process.

Final Thoughts

Your car’s IDV will usually reduce as the vehicle gets older, but that is different from deliberately choosing a much lower value every year. At renewal, focus on whether the figure reasonably represents the car’s current value rather than treating IDV only as a way to change the premium.

Read the renewal details carefully and understand how the selected value affects your cover. A balanced IDV can help keep the policy aligned with the vehicle you are actually insuring.