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Car Insurance 293 views April 5, 2021
It is mandatory to have third-party liability car insurance for all vehicle owners in India as per the Motor Vehicles Act, 1988. But this type of car insurance does not provide coverage against the losses or damage caused to your vehicle. But with the Standalone Own Damage Car Insurance, you can protect your finances against the damages caused to your vehicles by natural calamities, man-made disasters, theft, fire, accidents, etc. Unlike third-party liability car insurance, Own Damage car insurance is independent and optional. However, it is essential to have third-party liability insurance in the first place to purchase Own Damage car insurance.
Several insurance companies offer this type of car insurance as a standalone policy that individuals can choose simultaneously with the third-party liability policy. However, you don’t need to purchase Own Damage car insurance from the same insurer where you purchased Third-party liability insurance — You can choose the insurer according to your convenience after assessing different options.
On this page, we’re providing a detailed overview about different aspects of Own Damage car insurance — What is covered & not covered under it, its add-on options, factors that affect the premium amount, etc.
Table of Contents
What is Covered under Own Damage Car Insurance?
You can check the inclusions under Own Damage car insurance below.
- Damages caused to your car in an accident or collision
- Unfortunate theft of your vehicle
- Losses caused to your car in a fire or explosion
- Damages incurred to your vehicle due to a natural calamity
- Personal accident coverage (for treatments)
- Third-party liability
Different Own Damage Car Insurance Add-ons
Car insurers also provide different types of Own Damage Car Insurance add-ons to enhance your overall protection. To know more, you can check the below table.
| Own Damage Car Insurance Add-ons | Details |
|---|---|
| Zero Depreciation Car Insurance | Provides coverage for depreciation in the value of the car and its parts. So, you get the comprehensive coverage amount in case of a claim. |
| Return to Invoice Cover | This add-on helps you recover your invoice value (Car’s on-road price or Insured Declared value) back in case of a theft or total damage to your car. |
| No Claim Bonus (NCB) Protection | Get a significant discount on your premium by protecting your earned NCB in the policy year, even after filing a claim during the policy year |
| Engine and Gear Box Protection | With this add-on, you can secure your finances from the expenses incurred due to damage to your car engine |
| Emergency Assistance Cover | In case of an emergency, you will have 24*7 assistance regarding any technical or mechanical breakdown in your car |
| Downtime Protection | Provides daily commute expenses while your car is at the garage for the repair works. |
How to Calculate the Premium for Own Damage Car Insurance?
The premium amount is calculated as the percentage of the Insured Declared Value (IDV). The higher the IDV of your car, the higher will be the premium amount and vice versa. The formula with which insurers generally calculate the premium amount for Own Damage car insurance is as follows.
Own Damage car insurance Premium amount = IDV x (Premium Rate) + Add-ons – Discount & Benefits (NCB, Theft discounts, etc.)
Here IDV = Showroom price of the vehicle + Cost of the accessories (if any) – Depreciation Value as per the IRDAI
To know the depreciation value of your car of different ages as per the IRDAI, you can check the following table.
| Age of Car | % of Depreciation |
|---|---|
| Below 6 months | 5% |
| More than 6 months but less than 1 year | 15% |
| More than 1 year but less than 2 years | 20% |
| More than 2 years but less than 3 years | 30% |
| More than 3 years but less than 4 years | 40% |
| More than 4 years but less than 5 years | 50% |
It is important to declare the correct IDV at the time of purchasing the Own Damage Car Insurance, as it will affect your premium amount and claim amount during settlements. Other than the IDV of your car, some other factors, which also affect your premium amount, are mentioned below.
Age of the Car
The older your car is, the higher will be your premium amount due to the depreciation on it and its parts. You can mitigate this by choosing the Nil Depreciation Cover add-on.
Your Location
The location where you mostly drive your car can also affect your premium amount as a theft-prone area will be riskier for an insurer as compared to a safe location.
Model of your Car
Expensive car models with higher engine capacity (more than 1500cc) will attract a higher premium amount as compared to basic models with engine capacity less than 1500cc.
Fuel Type of your Car
The premium amount tends to be higher for cars running on diesel or CNG as compared to cars running on petrol.
Safety Features of your Car
Advanced safety features like Single or Dual Airbags, ABS, Collision warning systems, Hill support, Anti-theft alarms, can lower your premium amount.
What is Not Covered Under Own Damage Car Insurance?
Under Own Damage car insurance, you will not get coverage in case the following situations happen. Please check!
- Driving without a valid driving license
- Consequential damages (Damages took place after an accident)
- Contributory negligence
- Driving under the influence of drugs or alcohol
- Electrical and mechanical breakdown in your car
- Losses or damages due to depreciation in the value of your car