An Overview of Standalone Own Damage Car Insurance

Standalone Own Damage (OD) car insurance is a policy that provides financial protection for damages to your vehicle due to accidents, theft, natural disasters, or fire. Unlike third-party insurance, which covers liabilities toward other people, own damage insurance focuses on safeguarding your vehicle from unforeseen events. It was introduced by the Insurance Regulatory and Development Authority of India (IRDAI) in 2019 to give policyholders the flexibility to choose separate insurers for third-party and own damage coverage.

For example, if your car is involved in an accident and suffers extensive damage, the standalone OD policy will cover the repair expenses, ensuring financial relief for the policyholder. This flexibility allows car owners to compare policies and select the best coverage at competitive prices.

Comparison: Own Damage vs. Third-Party vs. Comprehensive Insurance

What Gets Covered in Standalone Own Damage Insurance?

Standalone OD insurance covers the following risks:

• Accidental Damage: Covers repair costs if your car is damaged in a road accident, reducing financial strain.
• Fire and Explosion: Compensation for damages caused by fire, explosion, or self-ignition.
• Natural Calamities: Protection against earthquakes, floods, cyclones, and landslides.
• Man-Made Calamities: Coverage for riots, vandalism, and acts of terrorism.
• Theft and Total Loss: Compensation based on the car’s Insured Declared Value (IDV) in case of theft or total damage beyond repair.

For instance, if a vehicle suffers engine failure due to water ingress during a flood, the standalone OD insurance will cover the repair costs, provided the policy includes an engine protection add-on.

Enhance Your Coverage with Add-ons

Policyholders can enhance their OD insurance with these add-ons:

• Zero Depreciation Cover: Ensures full claim settlement without depreciation deductions.
• Engine Protection Cover: Covers engine damage due to waterlogging or oil leakage.
• Roadside Assistance: Provides emergency services like towing, fuel delivery, and flat tire assistance.
• Return to Invoice Cover: Reimburses the full invoice value in case of total loss or theft.
• Consumables Cover: Covers expenses for items like lubricants and engine oil.
• Personal Accident Cover: Provides financial protection in case of accidental injuries to the owner-driver.

For example, a zero depreciation add-on ensures that if a car requires part replacements after an accident, the insurer pays the full cost without factoring in depreciation, significantly lowering out-of-pocket expenses.

Exclusions to Coverage

Standalone OD insurance does not cover:

• Regular Wear and Tear: Normal aging of car parts.
• Mechanical and Electrical Failures: Unless caused by an insured peril.
• Driving Without a Valid License: Claims are rejected if the driver lacks a valid license.
• Driving Under Influence (DUI): Damages caused while intoxicated are excluded.
• Consequential Damages: Damage arising indirectly from an earlier event (e.g., ignoring a small crack that later shatters).
• Intentional Damage: Any deliberate damage for claiming insurance.

Who Should Buy Own Damage Insurance?

Standalone OD insurance is ideal for:

• New Car Owners: Protects against high repair costs.
• Individuals with Existing Third-Party Insurance: Ensures compliance while offering better protection.
• Car Owners in High-Risk Areas: Useful for those living in flood-prone or theft-prone regions.
• Frequent Drivers: Reduces financial risk due to regular driving exposure.
• Owners of Expensive Vehicles: Crucial for luxury car owners due to high repair costs.

Calculating the Premium for Own Damage Insurance

The premium for OD insurance depends on:

• Car’s Insured Declared Value (IDV): Higher IDV results in a higher premium.
• Car Model and Age: Newer and luxury cars have higher premiums.
• City of Registration: Metro cities have higher premiums due to traffic density and theft risks.
• No Claim Bonus (NCB): Discounts for claim-free years.
• Chosen Add-ons: More add-ons increase the premium but enhance financial security.

For instance, a five-year-old hatchback will have a lower OD premium than a brand-new luxury SUV due to differences in IDV and risk factors.

Examples of Standalone Own Damage Insurance in Action

• Case 1: Accidental Damage
  A sedan collides with a divider, resulting in severe front-end damage. The OD policy covers repair costs after deductibles.

• Case 2: Theft
  A parked car is stolen, and the policyholder receives compensation based on the car’s IDV.

• Case 3: Fire Damage
  A car catches fire due to an electrical short circuit, and the policy reimburses the cost of repair or total loss settlement.

How Standalone Own Damage Insurance Works

1. Choose a Policy: Select a standalone OD insurance plan from a trusted insurer.
2. Pay the Premium: Premium depends on IDV, car model, and add-ons.
3. File a Claim When Needed: Report damage, theft, or loss to the insurer.
4. Claim Settlement: The insurer processes and approves the claim after verification.
5. Repair or Reimbursement: Policyholder gets cashless repairs at network garages or reimbursement for non-network repairs.

Suggestions or Improvements in Own Damage Insurance

• Bundled Discounts: Offering discounts for combined third-party and OD policies.
• Customizable Add-ons: More flexible add-on selections for policyholders.
• Instant Digital Claims Processing: Faster settlements through AI-based inspections.
• Usage-Based Pricing: Premiums adjusted based on driving habits.
• Telematics-Based Policies: GPS tracking to determine real-time vehicle usage for premium adjustments.

Real-World Statistics

• 85% of new car buyers opt for comprehensive insurance, but standalone OD policies are gaining popularity due to affordability.
• 20% of vehicle theft claims in India are settled under OD insurance annually.
• Zero Depreciation claims form over 60% of total OD claims in urban areas.

Final Conclusions

Standalone Own Damage car insurance is an essential financial safeguard against accidents, theft, and natural calamities. By selecting the right add-ons and understanding exclusions, policyholders can optimize their coverage. With proactive policy selection and efficient claim management, car owners can ensure comprehensive protection and financial security.