A car insurance policy is mandated by the Motor Vehicles Act, 1988. The Act states that every car in India should carry valid third party coverage. This coverage protects third party interests. It pays the liability that the car owner suffers if the car hurts or kills any third party or damages third party property. However, if the car itself suffers any damage, there is no coverage granted by the third party car insurance cover.
This is where own damage car insurance cover comes into the picture. Let’s understand what this cover is all about.
Own damage car insurance meaning
The own damage insurance for car is one that covers the damages suffered by the car itself. If the car is damaged due to natural or man-made causes or if it is stolen, the car own damage insurance cover would cover the financial loss suffered by the car owner and pay a claim.
Does basic insurance cover your own damage?
A basic insurance policy means a third party insurance policy that is mandated by the Motor Vehicles Act, 1988. As mentioned earlier, this basic insurance policy does not cover the damages suffered by the car. That is why, while third party cover is essential, you should also opt for your own damage car insurance for a comprehensive scope of coverage on the car.
Benefits of own damage car insurance
A policy of own damage insurance for car is recommended because of the various benefits that the policy provides. These benefits are as follows –
1. Coverage against minor or major damages
If the car suffers any minor or major damages due to an accident, natural calamity or man-made reasons, the own damage car insurance cover would compensate for the financial loss. The policy would pay the repair costs incurred in repairing the car if there is any minor or major damage. This would spare you considerable financial outgo as the repair costs can prove expensive, especially if you have a premium luxury car or if your car suffers major damages.
2. Coverage against theft
No matter how secure you keep your car, it might get stolen. When there is a theft, you stand to lose a considerable amount of money if the car is not traced back. The car own damage insurance policy covers theft cases too. If your car is stolen and not recovered, the policy pays a lump sum amount in the claim. This claim reduces the financial loss suffered and also allows you to buy a new car to replace the lost one.
3. Affordable annual coverage
The own damage car insurance coverage is allowed for one year after which it can be renewed for continued coverage. The annual policy has an affordable premium that you can easily play and enjoy a comprehensive scope of coverage.
4. Easily available
You can buy your own damage car insurance policy online in a few simple steps. Moreover, if you choose to buy the policy through Turtlemint, you can also compare the different plans available in the market and choose a policy that offers the maximum coverage at the lowest cost.
5. Choice of add-ons
The own damage car insurance policy comes with a range of optional coverage benefits called add-ons. These add-ons help in enhancing the scope of coverage of the policy at minimal premiums. You can opt for suitable add-ons and increase the coverage and the claim amount. Moreover, the add-ons take care of all possible contingencies that you might face when using your car.
6. No claim bonus
If you do not make any claim in your policy, you are entitled to receive a no claim bonus upon renewal. This bonus gives you a discount on the renewal premium. It starts at 20% for the first claim-free year and then continues to increase after every successive claim-free year. You can claim up to a 50% discount if you don’t make any claims for five successive years.
7. Attractive premium discounts
When you choose coverage for own damage, you can also get attractive premium discounts to reduce the premium. Discounts are allowed for installing safety devices, being a member of an automobile association, choosing a voluntary deductible, etc. besides the no claim bonus allowed by the plan.
Inclusions under own damage car insurance
The coverage offered by car own damage insurance is quite comprehensive. The policy covers the following cases of contingencies –
- Damages to the car due to natural disasters like earthquakes, floods, storms, hurricanes, landslides, etc.
- Damages to the car due to man-made calamities like riots, fire, strike, malicious activities, etc.
- Theft of the car
- Damages to the car when it is being transported by rail, road, sea or air
Exclusions under own damage car insurance
Despite offering a good scope of coverage, the following instances are not covered in car own damage insurance –
- Damages suffered when driving the car outside the boundaries of India
- Damages suffered when driving the car under the influence of alcohol and/or drugs
- Damages suffered when driving the car without a valid driving license
- Deliberate or self-inflicted damages
- Electrical or mechanical breakdown
- Depreciation and wear and tear suffered due to use
- Damages suffered when violating the limitations of using the car
- Damages suffered when using the car for carrying out illegal acts
How to calculate your own damage car insurance premium?
The premium of the own damage car insurance cover depends on various factors. When you consider these factors, you can calculate the premium using online premium calculation tools. The factors affecting the own damage car insurance premium are as follows –
1. The Insured Declared Value (IDV)
The IDV represents the coverage amount of the own damage car insurance cover. It is calculated by deducting the depreciation based on the age of the car from the market value of the car. The higher the IDV the higher would be the premium and vice-versa.
2. Age of the car
Since age affects the IDV, it is inversely related to the premium. If the car is old, the IDV would be low and so would be the premium. Thus, the premium for new cars is higher than the premium for older ones.
3. Registration details
The registration year and location determine the premium amount. The registration date shows the age of the car. A car registered recently would, therefore, be new and have a higher premium than an older registered car.
Similarly, the registration location is also considered for premium calculation. Cars registered in metropolitan cities have higher premiums than cars registered elsewhere. It is because the probability of claims and the expected repair costs are higher in metros.
4. Make, model and variant (MMV) of the car
The MMV of the car determines its market value. Depending on the market value, the premium is determined. Cars having high market values have high premiums compared to cars with lower values.
5. Add-ons selected
If you opt for the available add-ons, the premiums would increase because each add-on comes with an additional premium.
6. No claim discount
If you are renewing your own damage car insurance policy and there have been no claims in the previous years, you can claim a no claim discount. The higher the discount you have accumulated the lower would be the premium and vice-versa.
7. Other discounts
As mentioned earlier, you can claim a host of discounts under your own damage car insurance policy. So, depending on the discounts that you can claim, the premium would be calculated. Higher the discounts lower would be the premium and vice-versa.
8. Lapse of the policy
If you are renewing a lapsed car insurance policy, the renewal premium might be higher compared to renewing a policy within the due date.
When you enter these details in the premium calculator, the premium for the own damage car insurance cover would be calculated and displayed.
Standalone car own damage insurance policy
To opt for own damage cover, you have two options. These are as follows –
1. Comprehensive policy
A comprehensive car insurance policy includes coverage for the mandatory third-party liability as well as own damage cover. Thus, with a single policy, you can avail of both the coverage benefits.
2. Standalone own damage car insurance
As the name suggests, this policy covers only the damages suffered by the car. Coverage for third party liability is not allowed under this plan. The standalone own damage car insurance policy is available only if you have valid third party insurance coverage on the car. Usually, this policy is designed for new cars where five-year third party coverage is mandatory. In such cases, you can opt for a long term third party cover and an annual standalone own damage cover.
Own damage car insurance renewal
The own damage insurance for car is allowed for one year and you have to renew the policy annually for non-stop coverage. Own damage car insurance renewal can be done online or offline. Let’s understand how –
1. Offline own damage car insurance renewal
To renew your car own damage insurance offline you can either visit the branch of the insurance company or contact an insurance agent of the company. Provide your policy number to know the existing policy details. Pay the renewal premium online and do any changes in the policy if you want. Once the premium is received, the policy would be renewed.
2. Online own damage car insurance renewal
The online mode of own damage car insurance renewal is quick, easy and instantaneous. You can renew online from the website of the insurance company. Just visit the company’s official website, choose the renewal option and provide your policy details. You can check your existing coverage and also make changes if needed. The renewal premium would be displayed which you can pay online using any digital payment modes. Once the premium is successfully paid, the policy would be renewed instantly.
Alternatively, if you have bought your own damage car insurance policy online through Turtlemint, you can log into your account and renew through Turtlemint’s platform. Turtlemint also allows you to compare your existing policy with other available policies and then choose the best plan. Just pay the renewal premium online and your policy would be instantly renewed.
How to claim car insurance for own damage in India?
In case you suffer any contingency that is covered by the policy, here’s how to claim car insurance for own damage in India –
- Inform the insurance company immediately of the claim. The company would register your claim and issue you a Claim Reference Number. This reference number would come in handy for tracking your claims and for claim filing.
- When you inform the insurance company, it would direct you to take your car to the nearest networked garage. You can also get the list of networked garages in your area when intimating the claim.
- At the garage, the surveyor would visit and assess the damages suffered
- The surveyor would, then, prepare a claim estimate and submit it to the insurance company.
- Based on the surveyor’s estimate, the company would approve cashless repairs
- Once the approval is received, the garage would start the repair work. The bills would be settled directly by the insurance company
- For any inadmissible costs and deductibles you should pay the remaining cost of the repairs
- The claim form and other relevant documents should be submitted to the insurance company for claim settlement.
- Then you can take the delivery of your car
- If, however, you take your car to a non-networked garage, you would have to bear the repair costs initially. Then, once the repair bills and the claim documents are submitted, the insurance company would reimburse you for the costs incurred.
- In case of theft, inform the police and file an FIR
- The police would try and locate your car. If they fail to do so, they would issue a non-traceable certificate.
- Submit this certificate along with the other claim related documents for claim settlement.
- The insurance company would pay the IDV and the claim would be settled
You can also take Turtlemint’s help in case of your car insurance claims. Turtlemint has a dedicated claim handling team that would take the claim steps on your behalf and help you in getting a quick claim settlement. Just inform Turtlemint of your claim by calling 1800 266 0101 or by sending an email to firstname.lastname@example.org and then Turtlemint’s team would do the work to get your claim settled.
So, understand the concept of own damage car insurance and then buy suitable coverage for your car for all-around protection.
Frequently Asked Questions
- What would happen if I failed to do my own damage car insurance renewal on time?
If you do not renew your own damage car insurance policy on time, the policy would lapse and the coverage would stop. Thereafter, if there is any damage, you would have to bear the financial losses. You can renew a lapsed policy too but such a renewal would require inspection and the policy would be renewed only after a successful inspection is completed. The premium might also be hiked on such own damage car insurance renewals. If, however, you do not renew your policy within 90 days from the date of lapse, the accumulated no claim bonus would be lost.
- What is the rate of depreciation for IDV calculation?
The rate of depreciation for calculating the IDV depends on the age of the car. It is as follows –
Age of the car Rate of depreciation applicable
Up to 6 months
More than 6 months but less than a year
More than a year but less than 2 years
More than 2 years but less than 3 years
More than 3 years but less than 4 years
More than 4 years but less than 5 years
For vehicles aged 5 years and more, the IDV is decided mutually between the insurance company and the policyholder.
- Can my own damage insurance claim get rejected?
Yes, your claim insurance claim might get rejected for several reasons. For example, if the claim is made for an excluded cost, it would be rejected. Similarly, if there is a chance of fraud or if the claim process is not followed correctly, the claim would get rejected. Claims are also rejected if your policy has lapsed.
- Is own damage insurance cover more expensive than third party cover?
Yes, it is. The reason is that the own damage cover allows a wider scope of coverage than a third party cover. Moreover, the premium for own damage car insurance cover is determined by the insurance company and varies across insured while third party premiums are fixed by the Insurance Regulatory and Development Authority and are the same across insurers.
- What are deductibles?
Deductibles are a portion of claims that are not payable by the insurance company but by you. In own damage car insurance policies, there is a compulsory deductible which is to be paid in case of every claim. Moreover, there is a voluntary deductible too which is optional. If you choose this deductible and opt to pay a part of the claim out of pocket, you can earn a premium discount.