Car insurance is an essential financial safeguard for vehicle owners, but not all policies provide the same level of protection. According to the Insurance Regulatory and Development Authority of India (IRDAI), over 60% of vehicles in India are uninsured, putting many owners at financial risk in case of an accident or damage.
A standalone own damage (OD) car insurance policy offers comprehensive coverage for damages to your vehicle without the liability component of third-party insurance. Whether you own a brand-new car or a pre-owned vehicle, understanding how OD insurance works can help you make the right choice.
What is Standalone Own Damage Car Insurance?
Standalone own damage insurance is designed to cover damages to your vehicle due to accidents, fire, theft, natural calamities, or vandalism. Unlike a third-party insurance policy, which only covers damages to another person’s vehicle or property, an OD policy ensures your car is financially protected.
Introduced by IRDAI in 2019, this type of insurance allows policyholders to purchase third-party and own damage cover separately instead of bundling them. This flexibility benefits car owners by providing enhanced customisation of coverage.
Inclusions and Exclusions of Standalone Own Damage Car Insurance
Standalone own damage car insurance is car insurance for used cars and new cars. and you should know what is covered in your insurance.
Inclusions:
1. Accidental Damages: Covers repair costs if your car is damaged in an accident.
2. Fire & Explosions: Protection against damage caused by fire, self-ignition, or explosions.
3. Theft: Compensation for the total loss of the vehicle due to theft.
4. Natural Calamities: Covers damages due to floods, earthquakes, storms, landslides, etc.
5. Man-Made Disasters: Includes riots, vandalism, terrorist activities, and strikes.
Exclusions:
1. Third-Party Liabilities: It does not cover injuries or damages caused to others (needs a separate third-party policy).
2. Driving Under Influence: No coverage if the damage occurs while driving under the influence of alcohol or drugs.
3. Negligence & Illegal Use: Claims are denied if the vehicle is damaged due to reckless driving or illegal activities.
4. Wear and Tear: Standard depreciation and mechanical breakdowns are excluded.
5. Non-Compliance with Policy Terms: Any damage that happens due to policy violations, such as an expired policy, is not covered.
Benefits of Standalone Own Damage Car Insurance
The 2nd hand car insurance has several benefits as follows:
1. Financial Protection: Covers hefty repair costs, ensuring minimal out-of-pocket expenses.
2. Flexibility:Allows car owners to choose different insurers for third-party and OD coverage.
3. Customisable Add-ons:Can be enhanced with riders like zero depreciation, engine protection, roadside assistance, etc.
4. Peace of Mind:Safeguards vehicle owners from unexpected financial setbacks due to damages.
5. Higher Resale Value:Proper insurance coverage enhances a car’s market value, making it more attractive to buyers.
Comparison: Standalone Own Damage Car Insurance for New vs Old Car Insurance
The auto insurance for used cars and new cars is essential for you to make a strong decision. The below table makes it easy for you.
Factor
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New Car
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Used Car
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Premium Costs
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Higher due to the car’s higher market value
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Lower as the car’s value depreciates over time
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Claim Settlement
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Easier as newer cars have better documentation
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May involve more verification due to age
|
Add-ons
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Zero depreciation, engine protection, and return to invoice recommended
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Key replacement, and roadside assistance may be useful
|
Coverage Importance
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Essential to protect a high-value investment
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Still important to avoid financial burdens for repairs
|
Depreciation Factor
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Faster depreciation rate, so comprehensive coverage is ideal
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Slower depreciation, making minimal coverage viable
|
For new car owners, OD insurance provides the necessary coverage to protect a significant investment. On the other hand, used car owners can benefit from OD coverage to avoid repair costs without paying high premiums.
How to File a Standalone Own Damage Insurance Claim?
Filing an OD insurance claim involves a structured process to ensure smooth settlement:
- Inform the Insurer:Notify your insurer immediately after the damage occurs. Delay in intimation can lead to claim rejection.
- File an FIR (If Needed): In cases of theft, vandalism, or major accidents, an FIR is mandatory.
- Submit Required Documents:This includes a filled claim form, policy documents, registration certificate, and repair bills.
- Vehicle Inspection: The insurer may send a surveyor to assess the damage before approving the claim.
- Claim Settlement:Once verified, the insurer will process the claim, either reimbursing you or settling the amount directly with the garage.
Final Words
A standalone own-damage car insurance policy is a valuable addition to any vehicle owner’s insurance portfolio, whether for a new or used car. It ensures financial security by covering accidental and unforeseen damages. Before purchasing, compare policies, assess add-on options, and choose the right plan based on your car’s age and usage.
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FAQs
1. Can I buy standalone own damage insurance without third-party coverage?
No, third-party insurance is mandatory under the Motor Vehicles Act, 1988. You must have a valid third-party cover before purchasing OD auto insurance for used cars.
2. Is standalone own damage insurance more expensive than a bundled policy?
It depends on the insurer and the add-ons chosen. However, standalone policies offer better flexibility, allowing you to select the most cost-effective options.
3. Do older cars need standalone own damage insurance?
Yes, the car insurance for used cars can be transferred to the new owner along with the car’s registration. The insurer must be notified to update the records.
4. Are there any waiting periods for claim eligibility?
No, OD insurance does not have a waiting period. Coverage starts as soon as the policy is active, provided there are no exclusions applicable.
