A standalone policy that covers damage to the car insured by own-damage insurance provides coverage for any loss or damage. This plan is more affordable than comprehensive car insurance plans and allows policyholders to insure their cars without the need for third-party coverage.
What is Own Damage Car Insurance?
Car insurance for Own Damage a.k.a. OD Insurance, also known as motor insurance, is designed to protect your car from unforeseeable damages. This policy provides car insurance coverage to cover any damages your car may sustain due to fire, road accidents, or other mishaps. This policy provides additional coverage beyond third-party liability.
Comparative Comparison: Comprehensive Car Insurance vs Own Damage Insurance
Standalone, Own-Damage Insurance
Comprehensive Car Insurance
|Definition||This insurance policy covers third-party liability, including bodily injury and death. The Motor Vehicles Act of 1998 makes it mandatory.||This insurance covers the vehicle’s damage. Although it is not mandatory, this type of insurance provides more protection than third-party insurance.||This type of coverage provides coverage for both third party liabilities and own-damage costs.|
|Insurance||Only third-party liability||Only for own-damage||Third-party liability and own-damage cost|
|Benefits||Without it, you could be severely fined. You don’t have to worry about the expense if you have an accident.||It pays for your own damages, such as vandalism, theft, and total damage. This type of cover can be purchased as an add-on and you will receive NCB.||You will be covered for both third-party liability and your own damage.|
|Premium Amount||Low premium||With time, premiums drop in value.||Higher Premium covers both coverages under one premium. The cost of own-damage insurance decreases over time.|
|Depreciation Rate||The depreciation rate is not affected||The depreciation rate is a factor||Depreciation rate affects own-damage coverage|
Car insurance that covers your own damage is a benefit
The following are the benefits of own-damage auto insurance policies:
1. No Obligation To Opt for Long Term Comprehensive Plans
To meet the 3-year mandatory third-party car insurance coverage, new car/vehicle owners do not have to purchase a long-term comprehensive policy. Policyholders may choose to have a standalone own-damage policy that includes a third-party car insurance plan for 3 years and a standalone damage plan of 1 year. Both can be renewed annually.
2. Flexibility in choosing an insurance company
The Insurance Regulatory and Development Authority of India, (IRDAI), has allowed car owners to purchase a separate own damage policy. This means that car insurance policyholders can choose from different car insurers for both coverages.
3. Economical Car Insurance
Car insurance policies are now much easier to afford, thanks to the availability of separate third-party liability and standalone own-damage policies. Policyholders have the option to purchase their own policy to increase their financial benefits.
Who should buy stand-alone own damage insurance?
An individual own-damage policy will cover the policyholder for accidental damages and damages caused by transit, theft, vandalism, or natural calamities. The Insured Declared Valu, or IDV, will determine the amount of compensation you are allowed to receive. The depreciation rate, which is higher with age, determines the IDV.
How do you calculate depreciation?
This table shows how the depreciation rates work:
|6 months – 1 Year||15%|
|1 – 2 Years||20%|
With the depreciation rate having an impact on your compensation value, there will be times when it makes more sense to just set aside money for a mishap and keep your third-party coverage current. Keep in mind that even though the depreciation rate is high, the compensation still offers a lot of money, so it’s a good idea to keep your own-damage coverage if you have a new or expensive car. As an option, you can add zero-depreciation coverage to your existing own-damage policy.
What is covered by Standalone Car Insurance for Own Damage?
The following protection is offered by your auto insurance policy for own damage:
1. Accidental Damage – The auto insurance that covers your vehicle in the event of an accident or collision provides coverage for damages to your car.
2. Theft of your Car – This coverage provides compensation for your vehicle in the event that it is stolen, lost in a burglary, or damaged during housebreaking.
3. Fire Damage – Your own damage coverage will pay for any damage to your vehicle caused by fire, lightning, self-ignition, or other causes.
4. Natural Calamities Damages – Your own damage coverage will cover your vehicle for damages caused by natural calamities such as earthquakes, floods, and hailstorms.
5. Coverage for expenses resulting from man-made Disasters
What is not covered by Standalone Own Damage Car Insurance
These are some exceptions to the rule when it comes down to your own damage coverage.
1. Third-Party Liabilities-The standalone insurance policy will not cover third-party liabilities. They will only be covered under the third-party plan.
2. Driving without a License – Car insurance claims will not be accepted if the driver drives the car without a license.
3. Consequential Damages: These are damages that occur after an accident. These are not covered by their damage insurance.
4. Contributory Negligence – Your car won’t be covered if you do something wrong, such as driving in a flood zone.
5. Driving drunk – Only lawful citizens are covered by their own damage policy. No claims will be made if the driver is caught driving while impaired by alcohol.
How is the Own-Damage Premium Calculated
Insurance premiums for own-damage insurance cover for either your car insured or a two-wheeler are affected by many factors. These factors include:
- Type, age, and make of vehicle
- Your vehicle’s insured declared value
- Cubic capacity of the engine
- Geographical zone
The Indian Motor Tariff determines the percentage of Insured Declared Val that is used to calculate the premium for Own Damage Insurance.
Formula to Calculate Insured Declared Valu:
Insured Declared Valu = Showroom Cost of the insured vehicle + Accessories cost (if applicable) – Depreciation value according to IRDAI
The formula for calculating the Own Damage premium can be found below.
Premium Own Damage = Insured Declared Valu or IDV X [Premium rate (as per insurance provider)] + [Add ons (eg. Bonus Coverage] – Benefits and Discounts (theft discount or No Claim Bonus) )].
Tips to Lower Your Premium for Own Damage Insurance
These tips will help you reduce your premium for own damage insurance premium.
- Voluntary deductibles: When you purchase insurance for your own damage, there are deductibles that you can choose to pay when you file a claim. You can increase your voluntary deductible percentage depending on your financial situation. This will directly impact your premium for your own damage.
- Declare The Right Insured Defined Value (IDV). It is important to declare the correct Insured Declared Valuation of your car, as this will impact both the claim amount and the Own Damage Premium.
- Transfer your No Claims Bonus: If you have an existing comprehensive motor insurance policy or own damage insurance, you should transfer your No Claim bonus to the existing insurance plan to get all of the discounts.
How do I renew my standalone own damage coverage?
These steps will allow you to renew your car insurance online.
Step 1: Visit our website InsuranceDekho
Step 2 Enter your car’s registration number and fuel type to continue. If you forget these details, you can enter the brand, year, make, and model of your car.
Step 3 Enter the expiry date and name of your insurance company.
Step 4 Fill out the section with your personal information, such as name, and phone number, and choose the tenure of the policy. Please also provide details about any claims that you have made during the past year. Next, click on “Continue”.
Step 5 All available quotes for your category will appear on your screen. Compare them all and choose the one that suits your needs best. You can also choose to add on coverages to your insurance policy.
Step 6 Once you’ve selected your policy and added-on covers click the “Buy Now” button. We will send you the policy document via the registered email address once we have received payment for the chosen policy.
How do I file a standalone insurance claim for my own damage?
These are the documents you need to submit for a claim on car insurance:
- Copy of the policy document
- Copy of FIR
- Copie of the registration certificate
- Original bills for the car’s repairs
- The evidence of the mishap
These are the steps to submit car insurance claims.
1. Inform your insurance provider: If you are in an accident, make sure that you take all safety precautions and call your insurance provider immediately.
2. File an FIR: If your car is damaged or stolen, it is important to file an FIR at the nearest station. When filing an insurance claim, you will need a copy of this FIR.
3. Collect Evidence: You must prove that the incident was a real mishap when you file a claim. Collect as much evidence as possible, take photos or videos, and keep track of the contact information of anyone who witnessed the incident.
4. Submit Documents. The documentation required to complete the claim process will vary depending on your insurance provider and your particular situation. These are the most commonly required documents and must be submitted to your insurance provider in order to process the claim settlement.
5. Surveyor: Once the documents have been submitted, the insurance company will schedule an appointment with the surveyor. To ensure that the damage is not overlooked, the surveyor will inspect the vehicle. You may be asked questions by the surveyor to ensure that you answer honestly. Any discrepancies could result in your claim being canceled.
6. Repairs: Once the claim is approved by the surveyor, you can send your vehicle for repair. This should be done in one of the network garages for your insurance provider. The garage will pay the repair cost directly, so there are no out-of-pocket costs.