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Standalone Own Damage Policy

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What is the Standalone Own Damage Car Insurance?

The mandatory third-party coverage in car insurance protects you against legal claims filed by affected third parties in an accident involving your vehicle. However, this policy does not cover the loss or damage suffered by your vehicle in that accident.

A standalone own-damage policy covers the expenses of repairs & replacement needed for your car after an accident. This product is essential for car owners with third-party insurance and seeking additional protection against accidental vehicle damage.

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How Does an Own Damage Car Insurance Plan Work?

The standard comprehensive car insurance plans cover both third-party liabilities and loss or damage to your vehicle due to an accident. After the accident, the ‘third-party’ car insurance component pays for the loss suffered by third parties. The ‘own damage’ insurance component pays for the repair expenses of your vehicle.

Therefore, a policyholder must submit two separate claims to get full compensation for the loss arising from an accident.

What is Covered under the Standalone Own Damage Policy?

The standalone OD car insurance covers the following aspects:

What is Not Covered under the Standalone Own Damage Policy?

The general exclusions of a standalone motor own damage policy are as follows:

Add-Ons Available With Own Damage Insurance Policy

The various add-ons that are available along with own damage insurance for a car are as follows:

How is the Premium Calculated for Own Damage Insurance?

The premium for own damage insurance is based on the following three factors:

2. Depreciation charges

3. Cost of car insurance add-ons purchased with the standard policy

The following formula is used to calculate the insurance premium:

IDV = (Car’s ex-showroom price – applicable depreciation) + (Cost of car’s accessories – applicable depreciation)

After calculating the IDV, it is multiplied by the premium rate of the insurance plan

The premium for Own Damage Insurance = (IDV * Premium Rate) + (Cost of Add-Ons Purchased) – (Discounts Available)

Eligibility Criteria to Buy Own Damage Insurance

Any citizen or resident of the UAE with valid identity proof such as an Emirates ID, Passport, or Resident Visa is eligible to purchase car insurance.

Buyers should possess all legal documents related to their vehicles.

A valid third-party liability insurance is also essential for purchasing a standalone OD policy for the car.

Benefits of the Own Damage Car Insurance

Some of the major benefits of purchasing own damage (OD) insurance for a car are as follows:

Own damage insurance covers your vehicle against loss due to accidental damage and theft.

Car owners having mandatory third-party liability coverage can purchase OD insurance for additional protection.

Policyholders can purchase third-party car insurance and standalone OD car insurance from two different companies to get the best coverage.

Buying own-damage car insurance for shorter periods can be more cost-effective than comprehensive car insurance plans.

Factors Affecting Own Damage Insurance Policy Premium

Some of the primary factors that affect the premium of a standalone own-damage policy are as follows:

Cost of the Vehicle

The insurance premiums are always higher for expensive cars with a high insured declared value (IDV). Such cars also entail high repair costs, and premiums rise in tandem with the price of the vehicle.

Vehicle Model

Newer cars have higher IDV and are charged higher premiums. Although older cars are more vulnerable to breakdowns, they are charged lower premiums as they have higher depreciation and lower IDV

Safety Features

Policyholders can get lower premiums by installing safety equipment such as an anti-theft device. This lowers the risk for insurers, and they reduce the premiums accordingly.

Type of Fuel

Vehicles that use common fuels like petrol or diesel attract lower premiums. Higher premiums are charged for cars that run on alternate fuel like CNG or electricity.

Location

The geographical area where you intend to use the car also influences the premium. Higher premiums are charged for places that are categorized as high-risk zones by the insurer. This includes areas that are prone to accidents or heavy flooding.

Policy Add-Ons

Buying more add-ons along with the base plan increases the overall premium for policyholders

Availability of NCB

Policyholders who have accumulated a higher percentage of no-claim bonus (NCB) on their policies can enjoy lower premiums

 

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Frequently Asked Questions on Own Damage Car Insurance

Yes. Comprehensive car insurance covers third-party liabilities as well as own-damage expenses. However, you can purchase both these covers separately as per your requirements.

No. It is mandatory under UAE laws for every car owner to have third-party insurance. However, buying own-damage insurance for a car is optional but desirable to enjoy higher protection.

OD car insurance policies in the UAE have a validity period of 12 months. Policyholders get a grace period of 30 days at the time of renewal every year.

The carinsurance premium depends on factors like your car’s age, model, make, driving history, and the insured declared value (IDV) of your vehicle.

Disclaimer: The Own damage car insurance may have limitations, exclusions, and other terms and conditions that may affect coverage. please read the policy wording documents carefully as they detail the terms and conditions under which your policy will cover your vehicle.