Motor Insurance Own Damage Cover Can Be Bought Separately Now

As per a recent circular issued by the IRDAI, effective from 1st Sept 2019, motor vehicle owners can purchase standalone own damage motor insurance cover. Two flexibilities will be allowed to the vehicle owners on this front. Firstly, they can choose to purchase their own damage motor insurance policy on a later date and not along with the Third-Party insurance.

Secondly, policy holder can purchase the Own Damage cover from a different insurance service provider if they wish to.

Motor Insurance Own Damage Cover Can Be Bought Separately Now

Important Note- To purchase standalone own damage the person must have third party insurance and customers are advised to go through the policy documents carefully before purchasing. The Motor Vehicles Act of India, 1988 mandates to purchase insurance for every vehicle owner. Third party only (TP Only) insurance, as the name suggests, only covers the damages caused by your car to third party while plying on road. It does not cover any damages caused to his vehicle.

What is Own Damage

To exempt the chances of incurring huge expenses on account of accident, it is important to take a cover which protects your own vehicle. One must opt for their own damage motor insurance policy. Own damage insurance is not mandatory (legally) but having the same can save you from huge expenses on damages caused to your own vehicle at the event of an accident, or any other natural calamity.

Own damage or Self damage insurance cover includes the following:

• External accidental damages caused to vehicle
• Any act of terrorism
• Natural Calamities- earthquake, landslide, rockslide, cyclone, etc.
• Burglary, theft, riots
• Damages in case of theft or burglary

Own damage insurance cover doesn’t cover the following:

• If the driver doesn't hold a valid driving license
• Accident taken place beyond geographical boundaries of the country
• Wear and tear depreciation
• Theft of accessories when vehicle is not stolen
• Mechanical or electrical breakdowns
• Contractual liability if any

How To Purchase Own Damage Cover Separately?

One can go online, compare the prices of the Own Damage premium and choose the best suitable cover for the vehicle. Also, those who already brought the long-term policy this year i.e., 1+3 for four wheelers and 1+5 for Two Wheelers, need not renew (Third Party Cover) for coming years. They can purchase a standalone Own Damage policy from the same insurer or from other insurer at the time of renewal. The standalone own damage policy document includes your previous Third Party policy number, start date, expiry date and the insurer name.

As per the new circular by IRDAI, it will be fairer for the policy holder in terms of choices. They are also likely to get lower premium rates as there will be an increase in competition.

*Note - As per the new guidelines from the regulator, the Standalone Own Damage component is available for long term/bundled policies (1+3 in Pvt car and 1+5 in two-wheeler). One can renew the own damage component from the same or different insurer. Third-party cover is compulsory for taking own damage cover at the time of renewal.