While I am not an underwriting guy, I do work in the legal department of insurance company, so I will try to answer by saying that higher than market value IDV may not be honoured by the insurance company in total loss settlement, and they will always try to negotiate for your accepting the market value. Though legally the IDV is the amount the company would be bound to settle the total loss claim for (less policy excess, salvage deductions etc)
In accident constructive total loss/salvage loss settlements, where repair cost exceeds 75% of the IDV, there is possibility to get some recovery value from salvage, they will identify a salvage buyer with whom you need to enter an agreement to sell the salvage and the net payment would be made to you after deducting the salvage amount.
You might be even be forced to go the legal route if you want to insist on full IDV settlement. Unless the difference between IDV and market value is so huge, it might not be worth contesting the amount. So getting the full IDV when you've insured over and above the market value will be very tough though possible, but do you really want a full-fledged dispute over the insurer for the balance amount? The time and money spent in legal proceedings might not be worth it. Note that any Insurance company will always try to minimize their loss.
I would suggest going for the normal IDV that the company offers. Paying a higher premium for a higher IDV might not necessarily result in a benefit, and that too you need to consider what are the chances that you will get a total loss. At least, even if they negotiate for market value, it may not be much less than the IDV.
Higher IDV sounds tempting, but the fact is you need to consider:
1. it is irrelevant for normal repair claims where the repair option is feasible and viable.
2. anyway insurer will always try to negotiate settlement at market value in total loss claims.
3. what are the chances of going for a total loss / salvage loss claim?'4
Finally note that anway insurance company will not give you an excessively high IDV anyway. At best you may get a variation +/-20% on the normal IDV.
In accident constructive total loss/salvage loss settlements, where repair cost exceeds 75% of the IDV, there is possibility to get some recovery value from salvage, they will identify a salvage buyer with whom you need to enter an agreement to sell the salvage and the net payment would be made to you after deducting the salvage amount.
You might be even be forced to go the legal route if you want to insist on full IDV settlement. Unless the difference between IDV and market value is so huge, it might not be worth contesting the amount. So getting the full IDV when you've insured over and above the market value will be very tough though possible, but do you really want a full-fledged dispute over the insurer for the balance amount? The time and money spent in legal proceedings might not be worth it. Note that any Insurance company will always try to minimize their loss.
I would suggest going for the normal IDV that the company offers. Paying a higher premium for a higher IDV might not necessarily result in a benefit, and that too you need to consider what are the chances that you will get a total loss. At least, even if they negotiate for market value, it may not be much less than the IDV.
Higher IDV sounds tempting, but the fact is you need to consider:
1. it is irrelevant for normal repair claims where the repair option is feasible and viable.
2. anyway insurer will always try to negotiate settlement at market value in total loss claims.
3. what are the chances of going for a total loss / salvage loss claim?'4
Finally note that anway insurance company will not give you an excessively high IDV anyway. At best you may get a variation +/-20% on the normal IDV.
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