Benefits of Choosing a Standalone Own Damage Insurance Policy for Your Honda Car

Posted on: Oct 1, 2024 | 3 mins | Written by: HDFC ERGO Team

Benefits of Choosing a Standalone Own Damage Insurance Policy for Your Honda Car

Own Damage Insurance is specifically designed to cater to the damages and losses incurred by the policyholder's concerned vehicle. This means that this plan will cover all the repair costs of that vehicle considering all the terms and conditions of your chosen plan.

In case, your vehicle faces any damage due to any accident, this policy will cover the repair and replacement costs according to the policy terms, without worrying about any OUP.

However, you must remember that Standalone Own Damage Insurance is not enough as per the legal standards. You need to maintain a separate third-party policy if you own an OD plan.

Any car insurance that allows coverage for both your car and third party, then it is termed comprehensive insurance.

What is Standalone OD cover?

This is a special car cover, that is specifically designed to cater to the damages and losses suffered by the vehicle of the concerned policyholder, considering all the terms and conditions of the chosen plan.

This plan is effective under certain specific circumstances like accidental damages and losses caused by recognised external sources, theft without resulting in the entire loss of the vehicle, total loss, fire/explosions, natural calamities, damage in transit, etc.

This type of car insurance has been publicly made available from 1st September 2019, as per the IRDAI directive. So, any vehicle purchased on or after this date is eligible to avail of this policy.

Even if you maintain a mandatory third-party cover, you can still purchase this plan separately.

How does the Standalone Own Damage policy work?

This car plan is optional but significant in protecting the damages and losses suffered by your vehicle under specific circumstances considering all the policy terms, rules and regulations. It includes accidental damages, and natural damages, like floods, earthquakes, typhoons, cyclones, landslides, etc. Certain insurers even offer coverage for manmade damages too, like theft, explosions, riots, terrorism attacks, etc.

How is OD insurance important?

Although third-party insurance is mandatory for every vehicle to meet legal standards, it does not allow coverage for the damages caused to your vehicle in the case of any accidental circumstance. The repair costs might prove to be pretty high, depending on the severity of the damage.

To prevent such unfavourable circumstances, OD insurance comes as a saviour. It allows coverage for the damages suffered by your vehicle, preventing a significant amount of out-of-pocket expenditure.

Who should purchase a Standalone OD cover?

Own Damage insurance is eligible for all car owners after September 2018. However, maintaining only this plan is not enough. You need to maintain the mandatory third-party plan to observe the legal protocols and avoid any legal obligation.

OD insurance is meant to recover from the damages and losses suffered by your vehicle caused due to natural disasters, human vandalism, accidental damages, etc. If you, unfortunately, face any such situation, OD cover will save you hard-earned money by preventing unnecessary financial drainage essential for repairing and replacing the damages.

Inclusions

Although the list of inclusions may vary from one insurer to another, certain standard inclusions of Own Damage Insurance are:

1. Accidental damage:

OD insurance usually covers the damages caused due to any accident or collision.

2. Explosion and fire:

Damages caused due to any accidental fire breakout or explosion get covered under the plan.

3. Theft:

Total loss or theft of your beloved four-wheeler is truly heart-wrenching. However, having a valid OD can offer an embalming effect on your injury by offering necessary coverage protection.

4. Manmade calamities:

This depends on the insurer. However, most insurance companies usually offer coverage for damages caused due to manmade calamities like vandalism, riots, strikes, etc.

5. Personal accident:

If your OD insurance includes personal accidental coverage, you will receive financial coverage for your physical injury up to a certain specific limit depending on the plan terms.

Exclusions

Although the list of exclusions varies according to the respective policies of the insurance companies and the regulations of the plan, certain standard exclusions include the following:

1. Third-party liabilities:

A Standalone Own Damage cover never allows third-party damage coverage. It is exclusively designed for first-party coverage and strictly follows that.

2. Depreciation:

An OD insurance cannot allow the prevention of reduction of your vehicle’s value with age due to depreciation unless you add a befitting rider of Zero Dep cover along with the basic OD policy.

3. Mechanical and electrical breakdown:

OD insurance does not cover damages caused by mechanical or electrical issues, except if it has happened due to any accident.

4. Intoxicated driving:

Any damage or loss caused due to illegal or intoxicated driving practices remains excluded from the OD coverage list.

5. Driving without DL:

Any damage caused while driving without a valid driving licence, does not get covered under OD coverage.

6. Nuclear attacks:

Damages caused by nuclear attacks and wars usually remain excluded from this OD coverage list.

How is the Own Damage insurance premium gets calculated?

The premium for the Own Damage Insurance is decided based on several crucial factors including:

• The IDV of the vehicle concerned

• The age of the vehicle

• The city where the concerned vehicle is driven

The standard formula that the insurance companies follow here is:

IDV = (the showroom price of the vehicle – depreciation value) + (price of car accessories – depreciation cost)

Own Damage insurance premium = IDV X (rate of premium) + riders – benefits and discounts on the chosen plan

You can customise your OD plan by adding befitting riders to it to expand the coverage span.

It is critical to know the coverage span of your insurance policy to ensure optimum insurance coverage protection for your vehicle.

Reducing the OD premium amount

Without compromising the coverage essential of your vehicle, you can ensure that it does not need to be a very expensive affair. Keeping these tips and tactics in mind, you can reduce your overall premium payment amount, prohibiting unnecessary financial drainage:

1. Enhancing voluntary deductibles:

You can reduce the premium payable amount, by increasing the voluntary deductibles during policy issuance. This implies the amount that you need to pay out of your pocket during a claim settlement.

2. Choosing the right IDV:

Your IDV must be wisely chosen to ensure optimum coverage at the most affordable rate.

3. Suitable riders:

Riders expand the coverage span of your chosen plan. However, unnecessary additions burden the plan and eventually result in financial drainage. Therefore, you must select the add-ons wisely and add only the most essential ones.

Benefits of OD insurance

Some of the significant benefits of an Own Damage insurance policy include the following:

1. Flexible:

Purchasing an OD cover is very simple and flexible. You can easily buy it along with your third-party plan. You can even add suitable riders to it.

2. Affordable:

OD insurance is budget-friendly and ideal for policyholders who face difficulty in paying a high premium amount. This plan can be renewed yearly.

3. Riders:

You can enhance the scope of the plan, by adding suitable riders to it according to your budget and requirement. Some of the popular riders include Zero Dep cover, NCB Protection cover, Engine Protection cover, Consumables cover, Roadside Assistance cover, etc.

Conclusion

We have discussed all the significant elements of an Own Damage insurance policy. When you are buying a Honda car, you can easily opt for Own Damage Honda car insurance along with the mandatory third-party plan, to ensure the protection of your vehicle.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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