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What is a Standalone Own Damage Car Insurance Policy?

In this article, we will be diving into the world of standalone own-damage car insurance policies to help you understand what’s in it and what’s not covered.

  • 18 Apr 2023
  • 5 min read

Are you tired of feeling like you are paying for car insurance that does not quite fit your needs? Maybe you are looking for coverage that specifically protects your car from damages caused by your actions without involving a third party. Or perhaps you are simply overwhelmed by the sheer number of car insurance policies out there, each with its jargon and fine print. Well, take a deep breath and relax because we are here to help. In this article, we will be diving into the world of standalone own-damage car insurance policies to help you understand what’s in it and what’s not covered.

What is Standalone Own Damage Insurance?

Standalone own damage insurance is a type of car insurance policy that provides coverage for damage to your vehicle caused by events such as an accident, theft, fire, or natural disaster. The Insurance Regulatory and Development Authority of India (IRDAI) introduced the concept of standalone own-damage insurance in September 2018 to increase consumer choice and provide more flexible coverage options. However, you can avail of this coverage if your car has active third-party liability insurance.

If you’re still a bit confused about own damage insurance meaning, let us dig deeper. For those unfamiliar, "own damage" (OD) refers to the harm done to your own property (in this context, your car). If your insurance has an OD clause, it will pay to fix your automobile if it is damaged. It's also possible to refer to this kind of insurance as "own damage" (OD) coverage, which stands on its own. But, third-party liability insurance refers specifically to a policy that does not provide coverage for the policyholder's damages but only covers damages to third parties. For instance, if you accidentally ram your vehicle into your neighbour's car, your auto insurance will pay to fix your neighbour's automobile. But you will end up paying for the cost of repairing your own vehicle. 

This is where a standalone OD insurance policy is handy and helps you save money.

Features of Standalone OD Car Insurance Policy

Here are some key features of standalone own-damage insurance in India:

Comprehensive coverage: Standalone own-damage insurance provides coverage for a wide range of damages to your own vehicle, including accidents, thefts, fires, vandalism, and natural disasters.

No-fault coverage: Unlike third-party liability insurance, which only covers damages to other people's property and injuries, standalone own-damage insurance covers damages to your own vehicle regardless of who is at fault in an accident.

Add-ons: You can enhance your standalone own damage insurance policy by purchasing add-ons. This will provide you with coverage for zero depreciation, engine protection, lock and key protection, roadside assistance coverage, and many more.

Discounts: If you have installed safety devices in your car, have a good driving record, and renew your policy on time, your insurer will give you a discount on your standalone own damage insurance premiums. You can lower the insurance cost by applying the no-claim bonus reward when renewing your car insurance policy.

Do note that there are certain exclusions too. For example, a standalone OD insurance policy will not provide coverage under certain circumstances, such as any damage to the vehicle due to the owner’s carelessness or driving without a valid license.

Also read:

What is Covered in Standalone Car Insurance by ICICI Lombard?

ICICI Lombard offers own damage insurance for cars. The coverage includes:

● Accidents:

The standalone OD policy covers the repair and maintenance costs incurred as a result of your car's involvement in a collision or accident within the specified geographical boundaries.

● Theft:

Four-wheelers are a significant investment; a theft could cause serious financial hardship. Nevertheless, you can cover this financial loss with car insurance up to the insured declared value. However, keep in mind that you are only eligible for compensation if the insured vehicle gets stolen in its entirety and not just its components.

● Manmade calamities:

Human-caused disasters such as riots, vandalism, or terrorism are unavoidable situations that can potentially harm property such as a house or a four-wheeler, as well as lead to unfortunate deaths. If your car gets damaged in such an event, your standalone car insurance policy by ICICI Lombard will pay for the repairs of your vehicle.

● Natural calamities:

Events such as an earthquake, tsunami, flood, or other similar unavoidable disasters can cause damage to your four-wheeler. However, with ICICI Lombard, you won't have to worry about the extra costs.

Hence, own damage car insurance policy by ICICI Lombard offers peace of mind and provides coverage for unforeseen circumstances.

Exclusions of Standalone Car Insurance

  • If you intentionally cause damage to your own car or someone else's property, your insurance does not cover the costs.
  • If you are using your car to commit a crime or activities prohibited by the government, your insurer may not cover any resulting damage or injuries.
  • If you are driving under the influence of drugs or alcohol, your insurance provider may not cover any resulting damage or injuries.
  • If you use your car for racing or other high-risk activities, your insurer may not provide coverage for any resulting injuries or damage.
  • If you have made modifications to your car that your insurance company does not approve, your policy may not cover any resultant loss or injuries.
  • If you use your car for commercial purposes, such as delivering goods or transporting passengers for hire, your personal car insurance may not cover any consequential injury or loss.
  • Your insurance provider may not cover damage to your car due to normal wear and tear, such as mechanical breakdowns or routine maintenance issues.
  • Accidents involving your car that result from a minor driver's negligence or a person who does not have valid insurance will not be covered by the insurance.

How is the Premium Calculated for Own Damage Insurance?

You can determine the premium for your car by applying the following formula:

Insured Declared Value X [Premium by insurer] + [Add-Ons costs] – [No Claim Bonus]

The insured declared value (IDV) is the maximum amount of compensation you can receive if your four-wheeler suffers irreparable damage or gets stolen. You can determine the IDV by deducting the depreciation cost from the original listed price.

Other factors insurers consider while determining the premium costs include:

● Age of the car:

Older cars generally have lower premiums as they have lower market values, while newer cars are more expensive to repair or replace, leading to higher premiums.

● Make and model of the car:

  • Certain car models are more expensive to repair or replace, which can lead to higher insurance premiums.

● Driving history:

If you have a history of traffic rules violations, the premium for car insurance will be higher.

● Location:

Insurance premiums can vary based on where you reside, as areas with higher rates of thefts or accidents have higher insurance premiums.

● Usage of the car:

Cars that are used for business purposes or driven more frequently may have higher insurance premiums than cars used for personal purposes and driven less frequently.

● Safety features:

Cars with advanced safety features such as anti-lock brakes, airbags, and anti-theft devices may qualify for discounts on insurance premiums.

As the number of vehicles grows, the cases of road mishaps and thefts of four-wheelers have become common with each passing day. A standalone own-damage policy protects your car from any unfortunate event, relieving you of financial stress.

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