Own Damage Car Insurance

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As per the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI) having an insurance policy for your car is mandatory. If you already own or are planning to buy a four-wheeler, you must acquaint yourself with the basics of car insurance. Though having a car insurance policy is a must, you do have the freedom of choosing the kind of insurance you want to have for your car.

Types of Insurance Plans

There are two types of Car Insurance plans that are available-

  1. Third-Party Liability Insurance plan
  2. Comprehensive Car Insurance plan

However, after the recent innovations by the IRDAI Own damage car insurance can also be bought as a standalone policy, provided you have third-party insurance already.

Also read - 

What is Own Damage Car Insurance?

An own-damage is any kind of damage that is caused to your car due to an accident, or a natural or a man-made disaster. Own Damage car insurance plan would cover you for the repairs that are required after your car is damaged due to accidents, collisions, fire, theft and even natural calamities like floods, earthquakes, landslides etc. 

The Recent Changes

  • Starting from 1 September 2019, Own Damage Insurance would be offered as a standalone yearly policy
  • Bundling up third-party and own-damage would not be mandatory
  • If you have third-party insurance from one company, you can buy own-damage from another
  • Own-damage can not be taken for the long term from 1-Aug-2020.

The Effect of these Changes 

  • As a vehicle owner, you can purchase OD as per your discretion
  • Insurance companies will offer more add-ons
  • Competition among insurance companies will lead to better pricing for customers
  • Flexibility and freedom to the consumers for choosing OD cover
  • Insurers will mention details of third-party insurance in the OD policy

Let us look at an example for a better understanding. Suppose you buy a new Honda City, and with it, you purchase 3-year third-party insurance.  However, you soon realise that you would want to protect your own car from damage too, so now you can either switch to a comprehensive car insurance plan or you can simply purchase an Own Damage policy. If you desire the two plans can be bought from two different insurance companies. 

Difference Between Comprehensive, Third Party and Own Damage Car Insurance 

To understand these three policies better, let us try and understand their differences:

ParticularsThird-Party Car InsuranceOwn Damage Car Insurance Comprehensive Car Insurance
What it MeansThe most basic type of policy that covers the loss and damages your car causes to the third partyThis plan can be bought as a standalone policy if you already have a third-party insurance planThis plan offers a combination of third-party liability along with its own damage cover
What it CoversOnly third-party losses will be covered, any damage to your own car will not be coveredDamages to your car will be coveredDamages to your car along with the third-party damages will be covered 
Premium AmountLowest Premium RateAffordable PremiumMost Expensive type of the three
Add-OnsNot availableAvailableAvailable
Who can buyAnyone who has a car has to buy a third-party insuranceAnyone who has third-party insurance can buy Own Damage policyComprehensive insurance covers third-party as well as own damage, so anyone who has a car can buy this kind of policy
Need to BuyMandatory Optional Optional
Tenure 3 years1 year1 to 3 years

Importance of Own Damage Car Insurance

Having an Own-Damage becomes very important when you only have third-party insurance. As discussed earlier third-party insurance is only liable to cover the damage or loss of the other person, it would not cover the repair cost of your car. Own-Damage will help you take care of all the financial burden that falls on you after an accident.

There are other benefits of a standalone Own Damage Car Insurance policy, let us take a look:

  • Save on your premiums as a third-party insurance plan is already purchased
  • Cashless claim facility for damages on your own vehicle
  • Customisable Add-ons
  • Easy claim process

Who Should Opt for Own Damage Car Insurance?

  • If you already have a third-party car insurance policy, you can purchase Own Damage car insurance that would protect your car from its own damages
  • If you have a very old car, you can get third-party insurance and along with it an Own Damage

What is Covered in Own Damage Car Insurance?

As discussed earlier, any kind of damage to your car is called Own Damage. The causes include:

  • Accidental Damages/Collision
    Any damage that occurs to your vehicle due to an accident or a collision
  • Natural Disasters
    Damage to your car due to - earthquakes, cyclones, floods, hail storms, landslides
  • Theft
    Though it is not physical damage, it would cause you a financial loss and will be covered in OD
  • Man-Made Disasters
    Damage to your car due to - Riots, Vandalism etc.
  • Fire
    Damage to your car due to accidentally/naturally caused a fire

What is not Covered in Own Damage Car Insurance?

  • Third-Party Liabilities
    If your car causes damage to a third party person or his vehicle or property, the losses would be covered in the already owned third-party policy, not by Own damage policy.
  • Drunk Driving
    An accident that occurs under the influence of alcohol or any other intoxication would not be covered under the Own Damage insurance.
  • Driving without a Valid License 
    When an unauthorised person drives your car, you won’t be able to make a claim in case of an accident. Needless to say, this is also against the law.
  • Consequential Damages
    Damages that take place after an accident will not be covered under Own Damage.
  • Negligent Driving
    An accident caused due to your carelessness and negligence will not be covered.

Add-on Covers Under Own Damage Car Insurance

Just like a comprehensive car insurance policy, there are a number of add-ons that are available with an Own damage policy, such as:

  1. Roadside Assistance
    If your car breaks down in the middle of nowhere, the car insurance company will tow the vehicle to the garage and also drop you safely at a place of your choice if you opted for roadside assistance cover in a car insurance policy.
  2. Zero Depreciation
    One of the most recommended add-ons, zero depreciation car insurance will entitle you to make a claim for the entire amount of replacement of car parts. You wouldn't have to pay from your pocket as there wouldn't be a depreciation deduction.
  3. Tyre Protect
    If the tyres of your car need replacement, the cost will be borne by the insurance company. The charges of removing, refitting as well as rebalancing will be borne by the insurer if you opted for tyre protect cover in your car insurance policy.
  4. Key Replacement Cover
    In case you lose your car keys or they get stolen, the company will cover the cost of a lock replacement if you opted for a key replacement cover. In case of a theft, however, you would have to lodge an FIR.
  5. Consumable Cover
    Nuts, bolts, lubricants etc are not covered under your basic car insurance, however, you can get a Consumable Cover and get them covered. Most companies consider cars that are up to 3 years old.
  6. Passenger Cover
    A lump sum amount is paid towards the insured passenger in case of his/her death or a disability that was suffered during an accident. The sum insured may vary for different companies.
  7. Return to Invoice
    In case of a theft or total loss, return to Invoice will help you get the amount you paid at the time of purchase. The road tax and the registration charges are also included.
  8. No Claim Bonus Protect
    For every year that you do not make a claim, the insurance company would offer you a discount in the form of NCB. However, with NCB protect cover in car insurance, you would be able to save your accumulated bonus even if you make a claim.
  9. Engine & Gearbox Protect
    This add-on is mostly available for cars that are up to 3 years old. It would compensate for repairs that are related to the engine, even when not linked to an accident.

This is a general list of add-ons, check the availability of add-ons from the car insurance company, you choose to purchase the plan from.

How to Buy Own Damage Car Insurance Online?

When buying car insurance online, you can visit the official website of a car insurance company or go to a comparison website. Follow the following steps:

  1. Select the make, model and variant of the car
  2. Select the City of Registration
  3. Select the Own Damage Standalone cover or also select third-party cover if you have it already
  4. Add add-ons if you want them
  5. Fill in your details like- Name, Mobile number and email address
  6. You will then receive the quotes on your email, if you are satisfied with the policy, you can proceed to make the payment, else, you can choose something else
  7. You will soon receive a soft copy of your car insurance own-damage policy

Note: If you have third-party insurance only, you can also add a standalone own-damage policy and even if your third-party insurance is long term, you can renew the own-damage policy annually. If you desire the two plans can be bought from two different car insurance companies. 

How to Renew Standalone Own Damage Car Insurance? 

To renew an own-damage policy, you can either visit the official website of a car insurance company or go to an aggregator website and select the own-damage policy you want to renew. In case you are renewing from the same company and are renewing before the expiry date, you simply need to : 

  • Enter the required details
  • Choose the Own-Damage plan
  • Select add-ons if you want
  • Pay the premium online and the policy will be renewed

Things to Remember: 

  1. In case you are renewing the policy after expiry, but during the grace period, you will have to request for a company surveyor, who would come to assess your car and then initiate the renewal of the policy.
  2. When renewing your car insurance, it is recommended that you review your options as well. In case you are not satisfied with your car insurance provider, you can renew the policy through another company.
  3. At the time of renewal, you also have the option of adding add-ons to your policy, if you haven’t already.
  4. During policy renewal, you can also have an option to utilize your accumulated NCB and get discounts on your next policy premium.

Factors Affecting OD Car Insurance Premium

When it comes to Own Damage cover, the following factors can affect the premium:

  1. IDV
    Insured Declared Value is the current market value of your car and plays a key role in fixing the premium
  2. Age of the Car
    With every passing year, the car depreciates and gradually loses its market value.
  3. Car’s cc
    The speed limit of your car depends greatly on its cubic capacity. The higher the cc, the higher the risk and thus higher the premium.
  4. MMV
    The model, make and variant of your car will be considered when calculating the premium.
  5. NCB
    Not making a claim can help you get discounts from the insurance company.
  6. Add-Ons
    The number and kind of add-on options you include in your plan will affect the premium amount.
  7. Policy Tenure
    When you buy a long-term policy, you can get a good deal on your OD car insurance premium. The premium discount offered by different companies may vary a little.
  8. Deductible:
    A deductible is an amount you agree to pay from your own pocket before the insurance company contributes towards the claim reimbursement. If you choose a higher deductible, the cost of the premium will automatically decrease.
  9. Location
    If you are buying a car in a town/city that is disposed to vandalism, or has a high road accident number, or has a high chance of theft, you may have to shed a little extra when buying OD car insurance.

How to File a Claim Under Own Damage Car Insurance?

There are two ways of settling an ‘own damage claim’-

  • Cashless
    After an accident, if you go to a network garage, Cashless claims can be made. The car insurance company would settle the claim directly with the garage. You would not be required to bear the cost of repair.
  • Reimbursement 
    In case you could not take your damaged car to a network garage, you can settle the claim through a reimbursement. You would have to pay for the damages yourself and then you can file a claim request with your car insurance company, which when approved will be compensated for.

Documents Required for Own-Damage Car Insurance Claims

The list of documents required at the time of making a car insurance claim is as follows:

  • Policy Papers
  • Copy of Driver’s License
  • Copy of the RC
  • Duly filled and signed Claim Form
  • Valid identity card
  • All repair bills, in case of a reimbursement

Also read - 

Own Damage Car Insurance FAQs

  • 1. Is OD car insurance mandatory to buy?

    No, unlike third-party insurance, Own Damage is an optional car insurance plan.

  • 2. Can I opt for standalone own-damage car insurance along with third-party insurance?

    Yes, in fact even a standalone own-damage car insurance plan can be purchased only if you already have third-party insurance.

  • 3. When did own-damage car insurance come into effect?

    In September 2019, IRDAI introduced a standalone Own-Damage policy, especially for the people who bought third-party insurance plans for the long term. This policy allowed them to purchase coverage for their own damages as well.

     

  • 4. How is the premium calculated for Own-Damage car insurance?

    To calculate the premium for Own Damage, the following formula is used:
    Insured Declared Value (IDV) X Rate of Premium + Add Ons - Discounts

  • 5. Is it compulsory to buy OD car insurance and third-party car insurance from the same insurance company?

    No, it is not. If you desire the two plans can be bought from two different insurance companies.

  • 6. Is it possible to shift from third-party car insurance to own-damage car insurance?

    Yes, if you have third-party car insurance already for 3 or more years, you can buy a standalone Own-Damage policy on an annual basis.

  • 7. Can a vehicle only be insured with standalone own-damage car insurance?

    No, as per the guidelines of IRDAI, having third-party insurance for your car is mandatory under the Motor Vehicles Act.

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