What is Own Damage Insurance for Car/Bike & How It Works?

Now protect your own vehicle against damage or loss due to accidents, theft, or natural calamities with Standalone Own Damage Insurance. Ideal for overall vehicle protection when bought with third-party insurance, Standalone OD Insurance ensures peace of mind and financial security in unexpected incidents. 

Own Damage Car Insurance protects your own car from damage and loss while Own Damage Bike Insurance protects your own two-wheeler. Know everything about Own Damage insurance to make an informed choice!

As the name suggests, an Own Damage Insurance is a customized motor insurance policy designed to protect you and your insured vehicle from your own damages, i.e. damages and losses caused to your own vehicle due to accidents, natural calamities, thefts, fir, and more.

Standalone Own Damage insurance is often included as part of a comprehensive insurance policy but can also be purchased separately, if you already have an active third-party insurance policy. 

Let’s understand with the help of an example. 

Let’s say your car is parked at its usual place and suddenly the tree beside lets down one of its branches or worse, your neighbor's cricket ball attacks one of its windows and the ultimate, a coconut falls and leaves not only shackles but dents too!

Funny as a story but, hefty losses in retrospection, in real life! In such situations, OD insurance is one that could help you get out of such unfortunate troubles. 

While having at least a third-party insurance is mandatory by law in India, Standalone Own Damage Insurance is not mandatory. Also, only those vehicle owners who already have a third-party policy can buy OD insurance.

However, it is highly recommended to have OD insurance as it provides coverage for damage to your own vehicle, offering additional protection beyond third-party insurance provides.

To buy Own Damage insurance online, you need to furnish the following documents:

• Car/Bike Registration Certificate  
• Previous year Own Damage insurance policy, if applicable 
• Any of these documents for KYC verification - PAN/Aadhar/DL/Voter id/Form 16/Passport

Here are the benefits of Own Damage insurance:

Protects Your Own Vehicle

Standalone OD insurance policy covers your vehicles' own damage or loss, meaning that you and your vehicle will be protected in case of natural calamities, theft, fire, and accidents. 

Financial Protection

OD cover also financially protects you and your vehicles and compensates you for repair or replacement costs for your vehicle in case of any unfortunate event. 

Customizable Add-ons

With OD insurance, you can also customise your policy by purchasing add-ons for enhanced coverage tailored to your needs. 

Affordable and Flexible

Standalone Own Damage insurance is an affordable insurance plan that protects your own vehicle, while also offering you the flexibility to choose a policy term that suits your needs.

Own Damage Premium is the amount you pay for your OD insurance to protect your own vehicle from damage caused by accidents, theft, fire, or natural disasters. The premium price for the same is usually determined based on the type of vehicle you own; how old it is and the city you use it in.

However, no matter what your premium price is, every OD insurance policy offers you protection from the following:

• Accidental damage caused by external means
• Burglary, theft and housebreaking
• Fire, explosions, implosions, lightning, and self-ignition
• Natural calamities like floods, typhoons, cyclones, hailstorms, etc.
• Earthquake, landslide and rockslides
• Transit of vehicles by rail, road, air, or inland waterways
• Terrorism attacks, riots and strikes, or malicious damage

Own Damage premium can be easily estimated using an online Car Insurance Premium Calculator or a Bike Insurance Premium Calculator for your desired vehicle. 

Here’s the mathematical computation of the Own Damage premium.

• OD Premium: IDV X [Premium Rate (decided by insurer)] + [Add-Ons (e.g. bonus coverage)] – [Discount & benefits (no claim bonus, theft discount, etc.)]
• IDV: Showroom Price of the Vehicle + Cost of Accessories (if any) - Depreciation as per (IRDAI)

The Own Damage Premium for both four-wheelers and two-wheelers varies depending on the following factors:

Make, Model and cc of Vehicle

The type of your vehicle also determines your own damage premium. The more high-end your car or bike is, the higher would be its OD premium. 

Age of the Car

Since vehicles depreciate and lose their value over time, the older your vehicle, the lower will be your own damage policy premium.  

IDV

One of the main factors that determines your OD premium is the Insured Declared Value of your vehicle, which is the current market value of your vehicle. The higher the IDV, the higher the premium.

No Claim Bonus

NCB in car insurance allows you to reduce your OD premium if already have an Own Damage cover and have made no claims in the previous policy terms.

Location

The RTO location of your vehicle or the city in which you drive your vehicle also affects the premium. Driving in a big city with higher traffic and accident rates will cost you more.

Add-ons Opted

The more add-on you buy with the Standalone Own Damage policy, the higher will be your premium.

Increase Voluntary Deductibles

In an OD insurance, there’s something known as Voluntary Deductibles, which refers to the amount of money you choose to pay during claims. Therefore, based on your feasibility you can increase the percentage of your voluntary deductible, which will directly reduce your OD premium.

Declare Correct IDV

With Digit, you are given the option to customize your IDV yourself. Therefore, make sure your IDV is always right since this will affect both your OD premium and your claim amounts too during claim settlements.

Don’t Forget to Transfer your NCB

If you’ve had an Own Damage or Comprehensive Motor Insurance policy before, ensure you transfer your NCB to your current policy, to get your accumulated discount.

This all depends on the kind of coverage and protection you want, both for your vehicle and your pocket! Your best bet would be to go for comprehensive insurance policy as it covers both the mandatory, third-party losses and damages and your own damages as well.

However, if you already have a valid Third-Party Insurance, you can simply go for an OD insurance to get complete coverage for your respective vehicle.

The total amount of coverage offered, at the time of claim, will depend on the conditions specified in the policy and obviously your insurance plan. Every year the extent of coverage and own damage premium changes because the value of the vehicle depreciates.