Own Damage Insurance
Own Damage Insurance covers damage to your own vehicle caused by accidents, theft, fire, natural disasters, or man-made calamities. It does not cover third-party liabilities, which are covered under a separate mandatory third-party insurance policy. To fully protect your vehicle and meet legal requirements, you must purchase Own Damage Insurance in addition to third-party insurance, or opt for a comprehensive policy that includes both.
Eligibility Criteria
- You must already have a valid third-party liability insurance policy for your vehicle. OD insurance can only be purchased as an add-on to the mandatory third-party policy, not as a standalone cover.
- The vehicle must be registered in your name and should have a valid registration certificate.
- OD insurance is available for both new and old vehicles. However, some insurers may set an upper age limit for the vehicle, such as up to 5 years old, to be eligible for standalone OD cover.
- The policy is available for vehicles purchased after September 2018, following IRDAI regulations.
- Continuous coverage is required. You must renew your OD policy on time to avoid lapses in protection.
- The vehicle must be used for private purposes. Using the vehicle for commercial activities may void eligibility or require a different policy type.
Features
- Coverage for your own vehicle: Protects against damages to your car from accidents, theft, fire, natural disasters (like floods, earthquakes, storms), and man-made calamities (such as riots, vandalism, and terrorism).
- No third-party coverage: Does not cover liabilities toward third-party injury, death, or property damage; a separate third-party policy is required.
- Customizable with add-ons: You can enhance coverage with add-ons like zero depreciation, engine protection, roadside assistance, NCB (No Claim Bonus) protection, and more.
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- Financial protection: Offers compensation for repairs or total loss (including theft) up to the Insured Declared Value (IDV) of the vehicle, after accounting for depreciation and deductibles.
- Premium calculation: Based on factors such as the car’s IDV, age, make/model, location, engine capacity, add-ons, and applicable discounts (like NCB).
- Optional and not mandatory: OD insurance is not legally required but is recommended for comprehensive financial protection.
- Standalone purchase: Can only be bought if you already have a third-party policy; cannot be purchased as the sole insurance policy for your vehicle.
- Add-on Covers: You can enhance your policy with optional add-ons such as zero depreciation (nil depreciation), engine protection, consumables cover, key and lock protection, NCB (No Claim Bonus) protect, and roadside assistance. These add-ons provide extra financial security for specific risks and can be tailored to your needs.
- No Claim Bonus (NCB): If you do not make any claims during the policy year, you earn a No Claim Bonus, which reduces your premium at renewal. This bonus can be accumulated over consecutive claim-free years and is transferable if you switch insurers.
- Insured Declared Value (IDV): The maximum sum insured (IDV) is based on your vehicle’s current market value after depreciation. Your claim settlements for total loss or theft are based on this value, which decreases as your car ages.
- Premium Calculation: The premium for OD insurance is influenced by factors such as the car’s IDV, age, make/model, location, engine capacity, and selected add-ons. Discounts like NCB also reduce your premium.
- Personal Accident Cover: Some insurers may offer a personal accident cover as part of the policy, providing compensation in case of accidental injury or death to the policyholder.
- Exclusions: Standard exclusions include third-party liabilities, regular wear and tear, mechanical or electrical breakdowns, damages from illegal activities, driving under the influence, and using the vehicle for racing or commercial purposes.
- Affordability and Flexibility: OD insurance is generally more affordable than comprehensive insurance and can be purchased for shorter durations. It is optional but highly recommended for wider protection.
Terms And Conditions
- Mandatory Third-Party Policy: You must have an active third-party liability insurance policy before purchasing or renewing an own damage policy. OD insurance cannot be bought as a standalone product without third-party coverage.
- Coverage: Own Damage Insurance covers your vehicle for losses due to accidents, theft, fire, natural disasters (like floods or earthquakes), man-made calamities (such as riots or vandalism), and damages during transit.
A compulsory deductible is applied to each claim, meaning you must pay a specified amount out of pocket before the insurer pays the rest.
You must promptly notify the insurer after an incident, submit required documents (like claim form, FIR for theft, repair estimates), and cooperate during the survey and claim assessment process.
If you don’t make any claims during the policy period, you are eligible for a No Claim Bonus, which reduces your premium at renewal. The NCB is transferrable if you switch insurers.
OD insurance is usually valid for one year and must be renewed annually to maintain coverage.
- Damage to third parties (requires separate third-party policy)
- Mechanical or electrical breakdowns
- Regular wear and tear, depreciation, or ageing of the vehicle
- Damage while driving under the influence of alcohol/drugs
- Damage when the driver does not hold a valid driving license
- Consequential losses (secondary damages not directly caused by a covered event)
- Use of the vehicle outside the policy’s specified purpose (e.g., using a private vehicle for commercial purposes)
- Damages outside the geographical area mentioned in the policy
- Damages due to war or nuclear risks
The claim amount for repairs or total loss is subject to depreciation rates as per the policy terms.
Scenarios where Own damage insurance claim rejected
Delay in Reporting the Claim:
Failing to notify the insurer within the stipulated time (usually 24-48 hours) after an incident can lead to rejection.
Policy Lapse or Expiry:
If your policy was not active at the time of the incident, the claim will be denied.
Driving Under the Influence:
If the driver was under the influence of alcohol or drugs during the accident, the claim is automatically rejected.
No Valid Driving License:
Claims are denied if the driver did not possess a valid driving license at the time of the incident.
Policy Exclusions:
Claims arising from events specifically excluded in the policy (e.g., war, nuclear risks, intentional damage) will be denied.
Insufficient or Incorrect Documentation:
Not providing required documents (FIR, repair bills, etc.) or submitting incorrect paperwork can cause denial.
Use of Vehicle for Uninsured Purpose:
Using a private vehicle for commercial purposes, or in a manner not declared in the policy, can void the claim.
Unauthorized Repairs:
Proceeding with repairs before getting insurer approval or inspection can result in claim denial.
Fraudulent or Exaggerated Claims:
Submitting false information, fake documents, or inflating the extent of damage leads to rejection and potential legal action.
Pre-existing or Unrelated Damages:
Claims for damages that were not caused by the reported incident, or existed before policy inception, are not covered.
Undeclared Modifications:
Claims for damages that were not caused by the reported incident, or existed before policy inception, are not covered.
Unlawful or Negligent Driving:
Reckless driving, over speeding, or violating traffic rules at the time of the accident may result in rejection.
How to avoid such scenarios
- Notify the insurer immediately: Inform your insurance company about the accident or damage within the specified time frame (usually 24–48 hours). Delayed intimation is a common reason for claim rejection.
- Document the incident: Take clear photographs of the damage and accident scene. These serve as crucial evidence during claim assessment.
- File the claim correctly: Fill out the claim form carefully and accurately. Avoid mistakes, omissions, or providing incorrect information, as these can lead to rejection.
- Avoid consequential damage: Do not drive the vehicle after an accident if it’s unsafe, as further damage (consequential loss) is not covered and may result in claim denial.
- Renew your policy on time: Ensure your insurance policy is always active. Claims made during a policy lapse will be rejected.
- Do not claim for exclusions: Familiarize yourself with the policy exclusions (e.g., drunk driving, driving without a valid license, using the vehicle for commercial purposes). Claims arising from excluded scenarios will be denied.
- Cooperate with the insurer: Provide all requested documents and information promptly. Non-cooperation can delay or jeopardize your claim.
- Disclose all relevant information: When purchasing or renewing your policy, disclose all required details honestly. Non-disclosure or misrepresentation can lead to claim rejection.
Keep thorough records: Maintain a file of your policy documents, premium receipts, and all correspondence with your insurer for reference in case of disputes.
