Buying a car in India is a big step for people as it solves several problems and makes life more convenient. However, for driving on Indian roads, you need to have at least valid third-party insurance. A third-party insurance policy helps the policyholder in paying for any damages towards a third party. Having third-party insurance was made compulsory keeping in mind the losses suffered by third parties in accidents caused by vehicle owners. For extensive protection, people often choose comprehensive car insurance that covers damages arising from their own damages as well as third-party damages.
In Car Insurance, Own Damage or OD refers to the damages suffered by the insured vehicle of the policyholder. These damages are suffered due to the fault or actions of the car’s owner and no third parties are involved in it. Basically, the OD section in insurance represents a clause that dictates the protection of the insured vehicle. It includes the cost of repair for the car in the event of an accident or any unfortunate event. These kinds of policies are also called Stand-alone Own Damage(OD) policies.
Let us understand this with an example. Let’s say if you hit your brother’s car while pulling out of a parking space and both cars bear damages, a third party insurance policy will only cover the repair cost of your brother’s car. It implies that while third-party insurance will take care of your obligation to repair your brother’s car, the cost of your car’s repair has to be paid by you. However, if you have an Own-damage policy, the cost of your car’s repair would also be covered by your insurer.
The intent of the Own damage or Stand-alone OD car insurance policy is to help policyholders cover losses suffered by their car. Here is a list of the kind of damages covered by this type of policy:
As per a directive of the Insurance Regulatory and Development Authority of India (IRDAI), the standalone OD car insurance has been available as a separate cover since September 01, 2019. The directive allows car owners who have purchased their car insurance post-September 01, 2018, to get standalone car insurance for Own-damage, while the basic 3-year third-party insurance remains mandatory.
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