Private Car Own Damage Insurance: Meaning & Benefits

As cities continue to expand, more people migrate towards urban areas. This expansion and sudden increase in urban population burdens the infrastructure. Another sign of increased population is the rise in the number of cars on the road.

More cars on the road mean an increase in the chances of accidents. Having a car insurance policy ensures that you and your car are financially protected from liabilities associated with road accidents. Apart from third-party and comprehensive car insurance, there is also a standalone own damage insurance policy that you can opt for, and here’s all you need to know about it.

What is a Standalone Own-Damage Policy?

In 2019, the Insurance Regulatory and Development Authority of India (IRDAI) allowed vehicle owners to purchase a standalone own damage insurance for their vehicles separately. For new cars, this policy is mandatorily bundled with third-party insurance. However, now you, as a car owner, can purchase it separately.

So, what does standalone own damage insurance mean?

As the name suggests, the policy is designed to provide you with financial compensation for the damages caused to your car. For example, if your car’s door gets damaged and the cost of repair is Rs.5000, the policy will either reimburse you or pay for the repairs through a cashless facility.

What are the Benefits of Own-Damage Car Insurance?

As you already know that the own-damage car insurance safeguards you by covering the damages to your own car. The key benefits include financial protection, cashless repairs and more.

Here are some of the key benefits of own damage car insurance:

1. Standalone own damage cover for private cars pays for hefty repair bills if your car gets damaged in an accident.

2. You can fix your car at top network garages, and you do not have to make any upfront payment.

3. Protects you against floods, storms, landslides, earthquakes, or any kind of natural and man-made disasters.

4. Gives you money if your car is stolen and is caught in a fire.

5. It lowers your renewal cost if you do not make any claims during the year.

6. You can add additional coverages such as zero depreciation or engine protection.

7. It reduces stress about unexpected expensive car repair costs. 

How Does Standalone Own-Damage Car Insurance Work?

Standalone own damage insurance is an optional but essential coverage that protects your car against various types of damage. While third-party insurance covers liabilities towards others, a standalone OD policy ensures that your car is financially safeguarded against damages or losses.

This policy provides coverage for scenarios such as accidental damage, theft, or total loss, which third-party insurance does not cover. Additionally, you can enhance this coverage by opting for add-ons tailored to your needs.

Key Inclusions

1. Accidental damages caused by external means

2. Theft or housebreaking (partial or total loss)

3. Fire, explosion, implosion, lightning, and self-ignition

4. Natural disasters like floods, cyclones, hailstorms, and earthquakes

5. Transit-related damages during transportation by road, rail, air, or waterways

6. Human-caused damages from riots, terrorism, vandalism, or malicious acts

Why Is Own-Damage Car Insurance Important?

Having standalone own damage insurance is important as it protects you from costly repairs or losses to your vehicle. While third-party insurance covers liabilities to others, OD insurance ensures that your own vehicle is protected, reducing out-of-pocket expenses.

With our standalone OD policy, you are compensated for damages covered under the policy, including total loss, accidental damage, and theft. Add-ons further enhance your protection for specific risks not included in the base coverage.

Also Read: Full-Coverage Car Insurance: A Comprehensive Guide

How is it Different From Third-Party and Comprehensive Insurance?

This insurance policy, compared to third-party and comprehensive plans, only covers damage caused to your car. It does not cover third-party damages. Hence, having only a standalone own-damage policy is not sufficient to comply with the law.

You must combine it with third-party policies. While a third-party policy covers only third-party legal liabilities and not own damages, a comprehensive policy covers both third-party and own damage.

Inclusion of Standalone Own-Damage Car Insurance

Here are the inclusions of this policy:

1. Damages caused to your car in an accident.

2. Damages to your car due to natural calamities such as floods and earthquakes.

3. Damages to your car due to manmade calamities such as riots.

4. Damages due to a fire.

5. Damages caused to/Loss of car due to theft.

Exclusions of Standalone Own-Damage Car Insurance

Here are the exclusions of this policy:

1. Third-party damages caused by your car.

2. Protection from the depreciated value of your car.

3. Breakdown of your car due to an electrical or mechanical fault.

4. Damages to your car if being driven under the influence of alcohol/drugs.

5. Damages to the car if being driven without a valid license.

6. Damages to your car caused during a war or terror attack.

Also Read: Things to Consider While Buying Car Insurance Policy

Who Should Buy Standalone Own-Damage Insurance?

The standalone Own Damage (OD) cover is suitable for car owners having an existing third-party policy, new car or bike owners, and drivers living in risky areas. The Own Damage policy is a voluntary independent annual insurance policy covering damage to your own vehicle.

Key profiles who should buy standalone own damage insurance:

1. Owners of cars purchased after September 2018, provided they already have third-party insurance.

2. Individuals with only third-party insurance looking to extend coverage to protect their car.

3. Car owners who want protection without opting for comprehensive insurance, ensuring their car is secure against their own damages.

When Should You Consider Standalone OD Insurance?

Individual own damage (OD) cover is advisable in cases where you have a continuous third-party policy, drive an expensive car, or wish to obtain cost-effective insurance for high-risk vehicles or old vehicles. This type of cover is appropriate for changing insurance companies or renewing comprehensive cover without disturbing your liability cover.

1. You have a longstanding active third-party insurance but need additional cover for the damage to your car.

2. Comprehensive insurance covers you until its own damage period expires, but you still need the third-party liability.

3. You need cover for expensive cars that require expensive repairs.

4. You need better OD cover without changing your third-party insurance cover.

5. Cover against natural disasters and theft in your locality.

6. Cost-effective alternative to renewing your comprehensive insurance cover.

Tips to Reduce Own-Damage Insurance Premiums

1. Opt for Voluntary Deductibles- Choosing a voluntary deductible lowers your premium, as you agree to pay a portion of the claim.

2. Select the Right Insured Declared Value (IDV)- Bajaj General Insurance allows you to customise your car's IDV, balancing adequate coverage with affordable premiums.

3. Utilise No Claim Bonus (NCB)- If you haven’t made claims in the previous policy year, transfer your NCB to enjoy discounts on your premium.

4. Buy Online for Discounts- Save up to 75% by purchasing your standalone OD policy online through our website.

5. Choose Relevant Add-Ons Only- Add-ons like Zero Depreciation or Roadside Assistance enhance coverage but increase premiums. Opt for only necessary ones.

Also Read: The Add-On Coverages in Car Insurance: Complete Guide

7 Common Mistakes to Avoid While Purchasing a Standalone OD Car Insurance

Making yourself aware of the mistakes which can occur when buying the Standalone Own Damage (OD) Car Insurance policy will help you secure a proper cover, prevent claim issues, and get the maximum from your premium payment.

Here are 7 common mistakes you need to avoid while purchasing a standalone damage cover policy:

1. Selecting the policy on the sole basis of its premium without comparing coverage and claim benefits of the other policies.

2. Not taking into consideration the Insured Declared Value (IDV) of your vehicle, which might affect your claim in the event of a total loss or theft.

3. Not considering the policy exclusions and inclusions in advance, which might cause you a claim rejection later on.

4. Neglecting the various useful add-ons like no depreciation cover, engine cover, roadside assistance, etc.

5. Not comparing various insurers not in terms of premium but also in terms of their claims settlement, network garages, and customer support.

6. Not providing the correct information regarding your vehicle or yourself during the policy purchase, which may create problems for you at the time of claim settlement.

7. Neglecting to renew your Standalone OD Car Insurance policy on time, making you have a break in your policy and also requiring you to undergo a vehicle test.

Factors Affecting Standalone OD Premiums

1. Insured Declared Value (IDV)- Higher IDVs mean higher premiums but better coverage for losses.

2. Car Age- Older cars have lower premiums due to depreciation.

3. Car Model- Premiums are higher for luxury or expensive cars due to higher repair costs.

4. Engine Capacity- Cars with larger engine capacities (>1500cc) attract higher premiums.

5. No Claim Bonus- A claim-free year leads to premium discounts during renewal.

6. Add-Ons- Additional covers increase premiums but offer enhanced protection.

7. Location- Cars used in urban areas have higher premiums due to increased risk of theft or damage.

8. Fuel Type- CNG or diesel cars have higher premiums compared to petrol cars due to increased maintenance costs.

9. Safety Features- Vehicles with advanced safety features like airbags have reduced premiums as they are less prone to severe damage.

How to Buy Standalone Own Damage Car Insurance in India?

You can get a Standalone Own Damage Insurance plan in India by comparing insurance plans, selecting the right insurance cover and add-on, entering your car's details, making the payment online, and getting your policy online.

For a smooth purchase, you need to take the following steps:

1. Prepare all the details of your vehicle, such as its registration number, make, model, variant, year of manufacture, and existing insurance policy details.

2. Compare Standalone OD policies of different insurance companies based on insurance cover, premium, claims procedure, and add-ons.

3. Choose the right Insured Declared Value (IDV) of your car that provides sufficient financial protection.

4. Choose the relevant add-on insurance covers like Zero Depreciation Cover, Engine Protector, and Roadside Assistance based on your requirement.

5. Go through the policy's inclusions, exclusions, terms, and conditions carefully.

6. Enter the correct details of your vehicle and personal details to avoid future problems regarding claims.

7. Make the premium payment through the desired online payment method and get your vehicle inspected.

8. Download and check your policy documents and make sure your third-party liability car insurance policy is valid.

How to Claim Car Insurance for Own Damage?

Here are the steps for filing a claim*:

1. Get in touch with your insurer either through their claim helpline number or through their website after your car has been damaged in an accident.

2. On the website, you can file a claim through their claim section. You would be required to provide details related to your car, the insurance policy, and the accident.

3. You should take photos and videos of the damage caused to your car.

4. The insurer would send a surveyor to inspect the damage.

5. If the insurer is satisfied with your claim, you have two options for getting the compensation. Either getting the car repaired at a garage and getting reimbursed by the insurer later, or getting your car repaired at a network garage with a cashless claim facility.

*Standard T&C apply

Should You Opt for This Policy?

While a standalone own-damage policy compensates for the damages to your car, it does not compensate for the damage caused to a third-party vehicle or property. In such cases, you might have to pay out of pocket for third-party damages.

Since a third-party policy is mandatory, you cannot legally drive your car without one. Alternatively, you can purchase comprehensive car insurance, where benefits of both third-party plans and standalone own-damage policies can be availed.

Final Words

A standalone own-damage car insurance policy provides financial protection for damages to your vehicle. While it is essential for safeguarding your car, it must be combined with third-party insurance to comply with legal requirements.

Assess your coverage needs and choose the right policy—standalone OD, third-party, or comprehensive—for complete protection against unforeseen risks.

FAQs

Can I switch from a comprehensive policy to standalone own-damage insurance?

Yes, but you must also have a separate third-party insurance policy to comply with legal requirements.

How can I reduce my standalone own-damage insurance premium?

You can lower the premium by opting for voluntary deductibles, choosing the right IDV, utilising NCB, buying online, and selecting only necessary add-ons.

Who should buy standalone own-damage insurance?

It is ideal for car owners with an existing third-party policy who want additional protection for their vehicle without opting for comprehensive insurance.

Can I buy only standalone own-damage insurance?

No, you must have third-party insurance as well. Standalone own-damage insurance provides additional coverage for your vehicle.

Does standalone own-damage insurance cover engine failure?

No, it does not cover mechanical or electrical failures unless you purchase an engine protection add-on.

What is the basic own-damage premium in car insurance?

The own-damage premium is the charge that you pay for insurance for the damage to your insured car, arising from accidents, theft, fire, natural or human-made catastrophes, without third-party liability insurance.

How to extend your standalone car insurance policy coverage?

You can extend your standalone insurance by getting an add-on cover which includes things like zero depreciation, engine cover, roadside assistance, consumable cover, and return to invoice.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

*Standard T&C apply