Own Damage Policy in Car Insurance

Motor insurance provides financial coverage in critical situations such as road accidents, theft, or loss, offering peace of mind and ensuring financial security. There are different types of motor insurance plans. The most common are third-party insurance, own-damage insurance, and comprehensive insurance plans. This article explains own damage car insurance with a focus on coverage differences, premium calculation, and suitability. It helps users understand when to choose an OD policy and how it fits their insurance needs.

The coverage scope of an own damage policy differs from one policy to another. However, the following pointers explain the most common policy inclusions: 

Coverage:

Own damage car insurance cover protects your insured vehicle from damage, in the following scenarios:

• Accidental or collision damage that meets the coverage criteria.

• Loss or theft of the insured vehicle.

• Damages caused to your car due to ignition, lightning, fire, etc.

• Losses or damage incurred due to man-made or natural disasters, depending on insurer-specific terms and conditions.

   

Ideally, every vehicle owner should opt for an own-damage insurance plan, as it provides crucial financial protection when it matters most, safeguarding both your car and finances. However, you should consider buying your own damage insurance plan if you:

• Are an existing third-party insurance owner: 

When you purchase a third-party insurance plan from an insurance company, they often give an own-damage offer, which is worth considering. Opting for it helps keep both premiums reasonable while providing extensive coverage that you can benefit from anytime.

• Are a frequent car user: 

If you use your car frequently, whether for intra-city or inter-city travel, there is a higher possibility of mishaps. Furthermore, depreciation could increase due to regular wear and tear. Buying an own damage insurance plan is beneficial in several ways here. It provides financial coverage to help restore your car’s condition and performance after an accident. 

• Want to protect your income and savings:

If you carefully plan your monthly income and savings, you certainly do not want unexpected expenses that could drain them. Buying your own damage insurance helps with this. It provides financial coverage for sudden liabilities, ensuring you don’t have to dip into your own funds.

You can enjoy the following benefits by opting for an own damage car insurance plan:

• Short-term tenure:
  Even if you buy a three-year third-party car insurance, you are not obligated to extend the own damage coverage for the same period. It comes with a one-year tenure and gives you flexibility.
• Affordable premium:
  Insurers calculate the premium for an own damage car policy based on your location, vehicle specifications, Insured Declared Value, etc. The overall premium is affordable if you choose the coverage wisely.
• Choosing different insurers:
  You can buy an own damage policy only when you have third-party insurance. But you enjoy the flexibility to choose different insurers for both plans.
• Add-ons:
  You can access add-on covers with a standalone own damage motor insurance plan to upgrade your protection.
   

While both own damage cover and comprehensive car insurance are voluntary choices and offer vehicle protection, they differ slightly. 

You can buy an own damage car insurance policy as an additional cover when you already have a third-party plan. Contrarily, comprehensive plans are independent insurance plans that combine third-party coverage with own vehicle protection.

If you like the benefits and convenience that an own damage policy provides, you can opt for it with your third-party car insurance. You can do this when you buy the third-party policy or add it at a later stage, during renewal. In both cases, the process is simple. You can find the own damage policy under the car insurance section, enter essential details about your car, and make the payment.

Note: The given information has been compiled from digitally available resources. It is subject to change due to several factors. 

1. Can I buy an own damage policy without third-party insurance?

Third-party insurance is mandatory by law. Hence, you need to buy it. Post its purchase, you can buy an own damage policy. 

2. Is own damage insurance mandatory in India?

No, own-damage insurance is not mandatory in India; it is best to buy it, as it provides financial coverage in case of a mishap. 

3. How often should I renew my own damage policy

How often you should renew your own damage policy depends on your existing policy duration. If it is a one-year policy, consider renewing it every year. This will ensure liabilities do not catch you off guard.