Own Damage insurance helps cover unexpected losses you may face because of your car. These losses include damage due to supernatural calamities, burglary, vandalism, terror attacks, etc. Also known as the Standalone OD Policy, this policy will help you cover all these unexpected damage expenses that your third-party insurance will not cover. You can buy the insurance with third-party insurance and protect yourself from all these unforeseen damages. Want to know more about what is Own Damage Insurance car insurance? Read ahead-
Own Damage Car Insurance
Own damage (OD) is exactly what it sounds like: damage to one’s body (in this case, car). The presence of the OD section in your policy indicates that it will cover the cost of your car’s repair. This type of insurance policy is also called a standalone OD policy. On the other hand, a policy without its own damage component only covers what you owe to a third party and is known as ‘third party liability insurance.’
Types of Car Insurance in India
For every car owner, an active car insurance policy is beneficial, whether a two- or four-wheeler. The primary motive is to protect the vehicle from damages and the financial burden that comes with it. In India, there are different types of Car Insurance-
- Third-party insurance providers
This policy type is mandatory by the law. Here are the benefits that you will get if you buy a third-party insurance policy-
- Replacement or damage of the third-party vehicle
- Medical bill or treatment charge of third-party
- Cost of liabilities that you may face in case of demise of the third party
The third-party insurance protects you financially and is mandatory as a vehicle owner.
- Personal accident insurance policy
The personal accident insurance policy provides cover against the accidents that the owner or driver may face. This financially provides financial security to the driver/ owner or loved ones. This policy lets you drive free of stress.
- Own Damage Insurance cover
As mentioned above, Own Damage Insurance cover protects you financially against damage due to natural calamity, man-made disasters and more. You can get this standalone insurance policy while buying a third-party insurance cover.
- Comprehensive car cover policy
A comprehensive car cover policy includes the highest protection level, including own damage vehicle, damage from natural calamities, personal accident cover and more. In this policy, you can get multiple add-ons as well.
- Having an Own Damage Insurance is helpful in protecting self from accidental damages and paying to the third party.
- You can buy your own damage insurance policy with third-party insurance.
- Own Damage Insurance expires along with the third-party insurance and will not cover your expenses after that.
Also Read: How To Get Car Insurance Online?
What are the Benefits of Own Damage Car Insurance?
Now that you are aware of what is own damage insurance, here are the benefits that the add-on policy offers-
There is No Obligation to Choose Long-term Comprehensive Plans
To meet the mandatory requirement of 3-year third-party car insurance cover, new car/vehicle owners are not required to purchase a long-term comprehensive car insurance policy. With a standalone own damage policy, policyholders can choose between a third-party car insurance plan for three years and a standalone damage plan for one year, which can be renewed annually.
Low-Cost Auto Insurance
Car insurance policies have become much more affordable for car owners with the availability of standalone own damage insurance policies and third-party liability covers separately. In addition, policyholders can now purchase their own damage policy at the best available price to supplement their financial benefit.
Also Read: Car Insurance Price in India
Flexibility in Insurance Company Selection
Following the release of the Insurance Regulatory and Development Authority of India (IRDAI) order, which allowed car owners to purchase a standalone OD policy cover in addition to a third party liability cover, car insurance policyholders are now allowed to choose different car insurance companies for both covers.
What is Covered Under Own Damage Car Insurance?
Apart from knowing what is Own Damage insurance policy, it is also necessary to know what all is covered under the policy. The standalone OD policy will protect your car from different types of damages that may put you under a heavy financial burden. Here are the types of damages that the standalone OD policy will help you recover-
- Accidental damage caused by external means is defined as any sudden, unexpected, or unintentional event or collision that can cause damage to the vehicle.
- Burglary, Theft, and Housebreaking: If your car is damaged due to a home break-in or a violent burglary attempt, the damage will be covered by the standalone OD car insurance. However, if the car is stolen, it will be a total loss.
- Total Loss: A total loss is the complete loss of your vehicle due to extensive and irreversible damage or theft. The total loss of your car is covered by own-damage car insurance, and you will be compensated for this type of damage.
- Fire, Explosions, Implosions, Lightning, and Self-Ignition: Fires caused by an accident or explosion that damage your car are covered by your own damage insurance policy.
- Natural disasters such as floods, typhoons, cyclones, hailstorms, and more: If your car is damaged due to floodwater, hailstorms, cyclones, and other natural disasters, your own-damage cover will protect you from these losses.
- Earthquake, landslide, and rockslide: If your car is damaged due to stones, rocks, and debris from an earthquake, landslide, or rockslide, a standalone OD policy protects you against financial losses.
- Vehicle transportation by rail, road, air, or inland waterways: If dents and scratches occur during vehicle transportation by rail, road, air, or inland waterways, the Own Damage insurance coverage will protect you and your car from this damage.
- Terrorist Attacks, Riots and Strikes, or Malicious Damage: Own damage insurance protects your car from losses caused by human factors such as a terror attack, rioting, vandalism, and so on.
Did You Know?
If you own an older or second-hand vehicle, you can obtain third-party insurance as well as Own Damage coverage.
Who Should Get an Own Damage Car Insurance?
As a car owner, if you want to save money on damage and repair costs from accidental damages, then a standalone OD policy is a must. If you have a car not older than 5 years, then you should buy the own damage insurance policy while buying third-party car insurance.
What is the Premium for Own Damage Car Insurance?
The own damage premium means that the premium usually depends on your vehicle and the purchased third-party insurance cover. The Insurance Regulatory and Development Authority of India published the fixed rates for the liability premium annually. It also depends upon your insured vehicle’s engine capacity.
Here are some components that insurance companies include while sending a quote that decides the premium-
- Car owner’s profession and age
- Registration area of the vehicle
- Insured Declared Value (IDV) of the vehicle
- Make and model of car
- Safety equipment in the car
- All the benefits and discounts the driver is eligible for
- All the add-ons that are included
- Additional voluntary deductibles that the owner will select at the time of purchase
All these factors will determine the premium you will have to pay if you opt for own damage insurance policy.
Word to Remember
Deductibles help in lowering the premium cost for the insurance holder. It also helps in saving processing costs for the insurance providers.
How is Own Damage Insurance Premium Calculated?
For the Own Damage Insurance cover, the premium is calculated as the percentage of Insured Declared Value. The Indian Motor Tariff decides this.
Insured Declared Value= Car’s showroom price + accessories cost (if any) – car’s depreciation value as per IRDAI
Once you have IDV, you can easily calculate the premium-
Own Damage Insurance= Insured Declared Value X [ Premium as per the insurer + additional coverage – benefits and discounts as per insurance provider]
Also Read: Car Insurance Zero Depreciation
What is the IDV in the Own Damage Car Insurance?
Insured Declared Value is the highest or the maximum amount you will get from the insurer if the vehicle is damaged. Suppose you met an accident due to any XYZ reason, then the insurer shall pay you the entire amount for the damage beyond repair. As an owner, you will have to declare the IDV of the vehicle/ asset while insuring it. The IDV will impact the premium you will pay for the insurance. If the IDV is higher, you will have to pay a higher premium.
How and Where to Buy Own Damage Car Insurance Policy?
Anyone in India who owns a vehicle is eligible to purchase their own damage insurance for bike or car plans. More information on the eligibility criteria can be found below:
- Vehicle owner: In India, you must be your vehicle’s owner. You can either own a bike/two-wheeler or a car and purchase your own damage insurance to protect it.
- Residency: In order to purchase such an insurance policy, you must be a resident of India. Tourists and people living in the country on a temporary basis may not be eligible for this type of auto insurance policy.
- Owner of a third-party insurance policy: Before you can get your own damage plan, you must first have third-party liability vehicle insurance. This is due to the fact that third-party insurance is a required type of motor insurance plan for all vehicle owners. After that, you can purchase your own damage insurance policy to cover your bike or car.
If you meet these requirements, you are now set to purchase your own damage bike insurance or car insurance plan.
You can buy the policy by narrowing down the own damage insurance policy providers of your choice. Once you have a list of your preferred insurance providers, visit their website, enter your car details and add-on you want in your package. Now compare the benefits, advantages, and premiums you will have to pay and select the suitable one per your requirement.
How is Claim Raised Under Own Damage Car Insurance?
If you want to claim raise for the Own Damage Insurance, here’s how to do it-
Get in touch with your insurer
As soon as the accident happens, get in touch with the insurer and inform them about it so the claim process may begin. Please note that you can only claim the insurance for a specific number of days only.
Complaint an FIR
Once the accident takes place, file an FIR as you cannot claim insurance without filing a First Information Report.
Evaluate the damage done
Once the first two steps are done, the insurer will now send a surveyor to access the damage done. Once the surveyor sends the report to the insurance provider, they will start the claiming process. You can opt for cashless settlement or reimbursement of all the repairs.
Now claim your settlement
Once the final report is submitted by the surveyor, the claim will be settled in the garage directly. You might also have to present the repair receipts from the garage as well.
Remember that while the insurance company will pay the major portion, you will have to bear some repair costs on your own too.
Also Know: Car Insurance Renewal
As a car owner, you should have the own damage insurance to protect yourself from accidental damages. Accidents are unforeseen and can occur anytime, so this is the best way to protect yourself from all the unforeseen financial troubles that will last a long time.
Own Damage Insurance is beneficial for car owners as it offers protection against various disasters which cannot be controlled. Also known as a standalone OD policy, it can be purchased as an add-on with any third-party insurance cover.
Car owners with a car not more than 5 years old, should buy their own damage insurance policy to protect themselves from unforeseen accidents or damages that may cost them a fortune.
If case of car theft, the insurance company will compensate the car’s declared monetary value that you have declared as the car’s Insured Declared Value. This will happen in case the car is not recovered. But for this, you will have to buy a own damage car insurance policy.
To raise a claim, here are the documents required-
– Claim form
– Car’s tax receipt
– Insurance policy copy
– Car registration certificate
– Driving license
– FIR copy
– Car repair bills
– Original payment receipt
To be eligible to buy a standalone OD insurance policy, you should have a vehicle; either a two-wheeler or four-wheeler, must be a resident of India and should have a third-party insurance policy.
If the third-party policy expires, the standalone OD policy will also expire. The third-party cover is necessary for a new car and the two-wheelers owners, and no policy can extend without the third-party cover policy.
This is one question that every vehicle owner wonders, is own damage insurance mandatory? According to the Motor Vehicles Act 1988, having a standalone OD policy is mandatory. However, the compliance rate is extremely low. This type of insurance provides greater protection to vehicle owners.