Own Damage Car Insurance Policy

Standalone Own Damage (OD) insurance pays for damage, theft, or total loss of your own car, subject to IDV, depreciation, deductibles, and policy exclusions. It does not cover third‑party liabilities, which are mandatory under the Motor Vehicles Act. Read more... Claims are settled contractually, and if repair costs exceed 75% of IDV, the vehicle may be declared a total loss. As per IRDAI norms, OD and third‑party covers can be bought and renewed separately. Read less

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What is Standalone Own Damage (OD) Car Insurance?

Standalone Own Damage (OD) car insurance is the part of a motor insurance policy that covers the cost of repairing, replacing, or compensating for damage to your own vehicle, subject to policy terms, depreciation, deductibles, and exclusions.

It does not cover third‑party liabilities, including injury, death, or property damage caused to others. Those liabilities are covered under a separate Third‑Party (TP) insurance policy, which is mandatory under Indian law.

This policy gives you the flexibility to protect your car without having to commit to a long‑term comprehensive policy from the insurer.

Meaning Why Introduced Working Reasons to Get Coverage Add-ons Key Features Car Insurance Plans Factors Affecting OD Tips to Reduce Premium FAQs

How Does Own Damage Car Insurance Work?

Let’s understand this with an example.

Suppose you’ve recently bought a new Toyota Etios. At the dealership itself, you’re sold a three‑year bundled third‑party insurance policy, which is mandatory for new cars.

About a year later, you realise that while third‑party insurance covers legal liabilities, it doesn’t protect your own car against damage, theft, or losses. You want coverage for your vehicle too, but without waiting for the policy expiry or switching to a full comprehensive plan.

In this situation, you can simply buy a Standalone Own Damage (OD) policy for your private car. It covers damages to your vehicle independently of your existing third‑party policy. You can also enhance this cover with add‑ons to protect yourself against specific expenses that aren’t covered under the basic Standalone OD policy.

Why Should You Buy Standalone Own Damage Car Insurance?

While Third‑Party Car Insurance is mandatory under the Motor Vehicles Act, it only covers injury, death, or property damage caused to others. It does not cover any damage or loss to your own car. This is where Standalone Own Damage (OD) car insurance becomes essential. Here’s why buying a Standalone OD policy makes sense:

1. Protects You from High Repair and Replacement Costs

Even a minor accident can result in repair bills running into thousands of rupees. A Standalone OD policy ensures these repair costs are covered by the insurer. If your car is stolen or damaged beyond repair (total loss), the insurer compensates you up to the Insured Declared Value (IDV), helping you avoid a major financial setback.

2. Covers Damages Beyond Your Control

A Standalone OD policy protects your car against risks that you cannot prevent, including natural calamities such as floods, cyclones, earthquakes, landslides, and storms, man‑made incidents like riots, vandalism, strikes, or malicious acts and fire‑related damages, including accidental fire, lightning, or self‑ignition. These events are not covered under third‑party insurance but can cause significant financial loss.

3. Lets You Enhance Coverage with Useful Add‑Ons

Standalone OD car insurance is highly customisable. You can strengthen your protection by adding covers such as Zero Depreciation Cover, which reduces deductions on replaced car parts, Engine Protection Cover, especially useful in cases of water ingress or oil leakage and Return to Invoice Cover, which reimburses the original invoice value (including road tax and registration) in case of theft or total loss These add‑ons are not available with basic third‑party insurance.

4. Offers Cost Flexibility

As per IRDAI guidelines, Own Damage and Third‑Party covers can be purchased separately. This means you don’t need to upgrade to a full comprehensive policy and you can keep your existing multi‑year third‑party policy. This gives you greater control over costs and coverage.

5. Rewards Safe Driving with No Claim Bonus (NCB)

No Claim Bonus applies only to the Own Damage (OD) portion of your car insurance, not the third‑party cover. If you don’t make any own‑damage claims during the policy year, you earn an NCB discount on your OD premium at renewal. This discount increases progressively with consecutive claim‑free years, and can go up to 50%. Importantly, third‑party claims do not affect your NCB, and the bonus is transferable when you change insurers or even when you buy a Standalone OD policy separately.

In simple terms, Standalone Own Damage Car Insurance ensures that your car is protected, your repair expenses are covered, and you’re not forced into an expensive bundled policy while still rewarding you for safe driving.

A Digit Car Insurance customer received a total loss claim of ₹48.70 Lakh in Mumbai

In a recent case from Mumbai, one of our policyholders experienced a total loss after their private car sustained severe damage. Fortunately, the vehicle was insured, and we processed a claim payout of ₹48.70 lakh. This case highlights the importance of having dependable insurance coverage to stay prepared for life’s unexpected turns.

This case highlights how OD insurance protects against financial shocks beyond third‑party liabilities.

What’s Covered in Own Damage Car Insurance by Digit?

Damages to your car in an accident

Covers for the damages caused to your car in case of an accident or collision.

Theft of your car

Will compensate for you in case your car is unfortunately stolen.

Losses caused to your car in a fire

In case there’s a fire and your car is damaged due to the same. Your own damage cover will cover for it.

Damages to your car due to a natural calamity

No one can stop nature’s many furies but in case your car is damaged due to it, we will be your one-stop for damage control.

What’s Not Covered in Own Damage Car Insurance by Digit?

While Own Damage insurance for cars is great for your car’s protection, here are a few exceptions.

Add-ons Available with Own Damage Car Insurance by Digit

Add-ons which you can buy with your car OD insurance policy at Digit are:

Engine and Gear-box Protection Cover

Do you know that the cost of replacing your engine is approximately 40% of its cost? In a standard car insurance policy, only damage caused during an accident is covered. However, with Engine and Gear-box Protection add-on, you can specifically also cover for the life of your car (the engine and gearbox!) for any consequential damage caused post the accident. This could happen due to water regression, leakage of lubricating oil, and undercarriage damage.

Key Features of Digit's Own Damage Car Insurance Policy

Key Features	Digit Benefit
Premium Discount	Up to 90% Off with PAYD Add-on
No Claim Bonus	Up to 50% Discount
Customizable Add-Ons	10+ Add-ons available
Cashless Repairs	Available at 9000+ Garages
Claim Process	Smartphone-enabled Claim process. Can be done online within 7 minutes!

Third-party vs Comprehensive vs Own Damage Car Insurance

Third-Party

Comprehensive

Own Damage

Damages/Losses to own car due to an accident	×	✔	✔
Damages/Losses to own car in case of fire	×	✔	✔
Damages/Losses to own car in case of a natural calamity	×	✔	✔
Damages to Third-Party Vehicle	✔	✔	×
Damages to Third-Party Property	✔	✔	×
Personal Accident Cover	✔	✔	×
Injuries/Death of a Third-Party Person	✔	✔	×
Theft of your car	×	✔	✔
Customize your IDV	×	✔	✔
Extra protection with customized add-ons	×	✔	✔

Digit's Cashless Garages

Get cashless repairs at 9000+ garages across India

List of 9000+ Network Garages

How is the OD Car Insurance Premium Calculated?

The premium for Own Damage (OD) car insurance is generally higher than third‑party insurance, but lower than comprehensive car insurance. This is because it covers only the damage to your own car, without third‑party liabilities.

Your OD premium is calculated based on a few key components, as explained below.

OD Premium Formula: IDV × Insurer‑defined premium rate + Add‑on covers chosen – Applicable discounts (such as No Claim Bonus)

Factors Affecting Own Damage Car Insurance Premium

In an Own Damage cover, your car premium is calculated depending on various factors, which are discussed below:

How Can you Lower your Car Insurance Premium

How to Reduce Your Own Damage (OD) Car Insurance Premium?

1. Choose a Higher Voluntary Deductible

By opting to pay a higher portion of repair costs yourself during a claim (voluntary deductible), you reduce the insurer’s liability resulting in a lower premium.
Best suited if you’re confident about handling small repair expenses.

2. Build and Preserve Your No Claim Bonus (NCB)

If you don’t raise any own‑damage claims during the policy year, you earn an NCB on your OD premium at renewal. This discount increases over time and can go up to 50%.
NCB applies only to OD cover and remains transferable even if you switch insurers.

3. Set the Right IDV (Insured Declared Value)

Ensure your car’s IDV reflects its current market value—not an inflated amount.

A higher IDV increases premium but raises claim payout

A lower IDV reduces premium but limits maximum compensation
Accurate IDV helps strike the right balance between cost and protection.

4. Avoid Add‑Ons You Don’t Need

Add‑ons increase premium. For older cars, covers like Zero Depreciation or Engine Protection may not always offer proportional value.
Choose add‑ons based on how you drive and where you park not by default.

5. Consider Pay‑As‑You‑Drive (PAYD), If Eligible

If your annual mileage is low, a PAYD OD policy can help reduce premiums by linking costs to how much you actually drive.

6. Avoid Small Claims When Possible

Raising frequent minor claims can eliminate your NCB and increase future premiums. Paying for small repairs yourself may be more cost‑effective in the long run.

How to Choose Between Standalone Own Damage and Comprehensive Car Insurance?

Situation	Better Choice	Why This Makes Sense
You already have a valid third‑party (TP) policy	Standalone Own Damage (OD)	Adds protection for your own car (accidents, theft, damage) without disturbing your existing TP cover.
You want one single policy for TP + own‑damage	Comprehensive Car Insurance	Easier to manage and renew, with both legal TP cover and own‑car protection bundled together.
You bought a new car with a long‑term TP bundle	Standalone Own Damage (OD)	A very common and practical setup—keep the long‑term TP and add OD separately for your car’s protection.
You want maximum protection with add‑ons (Zero Dep, Engine Protect, etc.)	Comprehensive or OD + add‑ons	Choice depends on whether you already have TP; add‑ons can be attached to either OD or comprehensive plans.
You do not have a valid third‑party policy	Comprehensive (or TP first)	OD alone is not legally sufficient; third‑party cover is mandatory under law.

What to Check Before Buying a Standalone OD Policy

How Does Own Damage Car Insurance Claim Affect NCB?

Own Damage (OD) claims directly impact your No Claim Bonus (NCB). While OD insurance protects your car, claiming every minor repair may cost you more in lost NCB than the repair itself. This is why it’s important to weigh the repair cost vs. NCB loss before filing a claim.

Repair Scenario	NCB Impact	Better Action	Why
Minor scratch or small dent	NCB may drop to 0% at renewal	Consider paying yourself	The repair cost is often lower than the NCB discount you would lose next year.
Medium repair (bumper, panel, headlamp)	NCB loss likely	Compare costs before deciding	If the claim payout is significantly higher than your NCB value, a claim may still be worth it.
Major accident with high repair bill	NCB loss, but damage is substantial	File a claim	OD insurance is meant for large, unexpected expenses where self‑paying isn’t practical.
Total loss or theft	NCB resets, but claim is crucial	Claim is essential	The payout far outweighs any future NCB loss.
You have NCB Protect add‑on	NCB usually retained (within limits)	Check claim limits, then decide	Small and even medium claims may not affect your NCB if covered under the add‑on.

A Simple Rule of Thumb

If repair cost < NCB you’ll lose, pay it yourself
If repair cost > NCB value, file a claim
If you have NCB Protect, check how many claims are allowed before losing NCB

This context helps users understand that OD insurance is not about claiming everything, but about using claims strategically to balance protection and long‑term savings.

A standalone OD policy works best when third‑party coverage is already in place and add‑ons are selected based on actual risk exposure rather than price alone. Reviewing these checks carefully helps prevent unexpected claim deductions and coverage gaps during renewal or repairs.

FAQs about Own Damage Car Insurance

All

Is standalone Own Damage insurance enough if I already have long‑term third‑party cover?

Yes. A standalone OD policy complements your existing third‑party insurance by covering damage, theft, and losses to your own car, without disturbing your multi‑year TP policy.

Will buying Own Damage insurance separately affect my No Claim Bonus?

No. NCB applies only to the Own Damage portion and stays intact even when OD and TP policies are purchased from different insurers or renewed separately.

What happens if my car is stolen under a standalone OD policy?

If your car is stolen and not recovered, the insurer compensates you up to the Insured Declared Value (IDV), subject to policy terms and documentation.

Does Own Damage insurance cover flood or water‑related damage?

Yes, flood damage is covered under OD insurance. However, engine or gearbox damage due to water ingress is covered only if you’ve opted for Engine Protection add‑on.

Are repair costs fully reimbursed under Own Damage insurance?

Repairs are covered as per policy terms, but depreciation and consumables may be deducted unless you’ve added covers like Zero Depreciation or Consumables Cover.

Can I choose add‑ons later or only while buying the OD policy?

Most add‑ons must be selected at the time of purchase or renewal. Mid‑term add‑on inclusion is generally not allowed except in specific cases.

Does a standalone OD policy include personal accident cover?

No. Personal Accident cover is not part of standalone OD insurance and must be purchased separately if not already included in your TP or comprehensive policy.

Will claims under OD insurance increase my future premium?

Filing an OD claim may reduce or reset your No Claim Bonus, which can increase your renewal premium. Third‑party claims do not impact OD premiums.

Is Own Damage insurance useful for older cars?

Yes, but add‑ons should be chosen carefully. For older cars, basic OD cover may be sufficient, while premium add‑ons may not offer proportional value.

Can I use any garage for repairs under OD insurance?

Yes, but cashless repairs are available only at network garages. Non‑network repairs are reimbursed later, subject to policy limits and approvals.

What if my car is damaged due to riots or vandalism?

Damages caused by riots, strikes, or malicious acts are covered under standalone Own Damage insurance, unlike third‑party‑only policies.

Does Own Damage insurance cover small scratches or dents?

Minor damages are covered, but claiming for very small repairs may not be cost‑effective as it can impact your No Claim Bonus at renewal.

Can I reduce my OD premium without reducing coverage?

Yes. You can optimise premium by choosing the right IDV, maintaining NCB, opting for PAYD if eligible, and avoiding unnecessary add‑ons.

What happens if my OD policy expires but TP policy is active?

Your car will remain legally compliant, but damages to your own vehicle won’t be covered until you renew or buy a new OD policy.

Is standalone Own Damage better than switching to a comprehensive policy?

If you already have a valid long‑term TP policy, standalone OD offers similar own‑car protection at a lower cost without forcing a full policy switch.

Why was my claim amount reduced?

Your claim amount may be reduced due to depreciation on replaced parts, policy deductibles, exclusions, or add‑ons not opted for. The final payout is calculated strictly as per policy terms, IDV, and surveyor assessment.

Who decides whether my car is repairable or a total loss?

This decision is made by the insurer based on the independent surveyor’s report. If repair costs exceed a defined percentage of the car’s IDV (as per IRDAI norms), the vehicle is treated as a total loss.

Why does depreciation apply even after I’ve paid the full premium?

Premium payment ensures coverage, not full replacement value. Depreciation reflects the car’s age and wear‑and‑tear, and is applied unless you’ve opted for a Zero Depreciation add‑on.

Written By

Manasvi Gupta

Reviewed by:

Mayur Kacholiya