Lesson 2 of 3 · 8 min
IDV, the deductible and the bonus
Three numbers on the own-damage side — IDV, the deductible and the no-claim bonus — decide how much of a repair or theft claim actually reaches you.
IDV is the sum insured on the own-damage side, and it is quietly negotiable. Declare a lower IDV and the yearly cost of the own-damage cover falls with it, because the insurer's worst case has shrunk. That saving is real.
So is the other half of the trade. Theft and a written-off vehicle are settled at the IDV, so the figure you chose to look thrifty in March is the figure you are paid in November. IRDAI's own handbook warns that a lower IDV adversely impacts you in the event of claim settlement.
Your turn
A bike's fair IDV is ₹80,000. Ravi declares ₹55,000 instead, to bring the yearly cost down. The bike is stolen. How much less does he receive than if he had declared ₹80,000?
Quick check
Your policy carries a ₹1,000 deductible. An own-damage claim is approved at ₹7,500. What does the insurer hand over?
The no-claim bonus is a discount for a year in which you claimed nothing. IRDAI's handbook puts it at 20% off the own-damage part after one claim-free year, rising by stages to a maximum of 50% after five in a row. It never touches the liability part.
Three things about it surprise people. Make one claim and the bonus is lost for the following year. The bonus belongs to you, not to the vehicle, so it travels to a new insurer or a new machine. Let the policy lapse for more than 90 days and the whole accrued bonus is gone.
Your turn
Priya has gone five years without a claim, so her no-claim bonus is at 50%. Next year's own-damage cost before the bonus would be ₹6,000. If she claims for a ₹4,000 dent this year, the bonus drops away. How much more does she pay next year?
The actual document
The schedule, and the three numbers you chose without noticing
Sample General Insurance Co Ltd
Private car package policy · 2026-27
- Insured
- S. Iyer
- Vehicle
- Hatchback, 2022, Pune
- Policy period
- 01/11/2026 – 31/10/2027
Own damage
- Own damage cost₹8,240
- Less: no-claim bonus at 20%-₹1,648
- Own damage payable₹6,592
Third party
- Third-party liability₹2,094
- Owner-driver personal accident₹330
- Third party payable₹2,424
Tax
- Central tax at 9%₹811
- State tax at 9%₹812
- Tax at 18%₹1,623
The cover itself
- Insured Declared Value (IDV)₹4,85,000
- Compulsory deductible₹1,000
- No-claim bonus next year25%, if no claim
A fictional schedule. Figures vary by vehicle, city and insurer; the three levers do not.
Tap a numbered marker to see what that line means.
- 1
Less: no-claim bonus at 20%. One claim-free year earns 20% off the own-damage half, rising by stages to 50% after five. Claim once and it resets — which is why a ₹4,000 dent can cost more than ₹4,000.
- 2
Third-party liability. Set by IRDAI, identical at every insurer, and the only part the law requires. No discount ever applies here — the no-claim bonus does not touch it.
- 3
Insured Declared Value (IDV). The sum insured, and it is negotiable — which cuts both ways. Theft and a write-off are settled AT this figure, so the number you trimmed in October is the cheque you receive in June.
- 4
Compulsory deductible. Your share of every own-damage claim, before the insurer pays anything. It is the reason a ₹1,800 claim is barely worth making once the lost bonus is counted too.
- 5
Total payable. Own damage plus third party plus tax. Only the own-damage part responds to the IDV and the bonus — the statutory half is fixed, which is why two quotes for the same car differ by less than they appear to.
Match them up
Five words on a motor policy
Drag each meaning up or down until it sits beside the term it belongs to.
Check yourself
1 / 3
Kabir asks
A bike's fair IDV is ₹80,000. Rahul declares ₹55,000 to bring the cost down, and the bike is stolen. What happens?
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