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.
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?
- Loss or damage to your vehicle due to an accident
- Loss or damage to your vehicle due to natural calamities such as floods, storms, earthquakes, etc
- Loss or damage to your vehicle due to man-made disasters such as riots, strikes, acts of vandalism, etc
- Loss due to theft or irreparable damage to your vehicle
- Coverage for loss due to fire, explosion, self-ignition, and similar hazards
What is Not Covered under the Standalone Own Damage Policy?
- Regular wear and tear of the vehicle
- Electrical or mechanical breakdown of the engine
- Consequential damages, i.e. those damages caused to the vehicle because prior damages were not repaired properly or on time
- Loss or damage to the vehicle due to a deliberate act of the driver
- Any accident that occurs when the driver is under the influence of intoxicants such as alcohol or drugs
- Loss or damage due to an accident caused by a driver who does not possess a valid driving license
- Usage of vehicle for unlawful activities or beyond specified purposes
- Legal claims filed by a third party due to an accident involving the insured vehicle (third-party liabilities)
Add-Ons Available With Own Damage Insurance Policy
Coverage for engine protection
Coverage for car accessories
Windshield protection cover
Coverage for geographical extension
Zero depreciation cover
No claim bonus (NCB) retention cover
Return to Invoice cover
Coverage for off-road driving
Key replacement cover
Consumable items cover
Daily cash allowance cover
Personal accident coverage for driver
Personal accident coverage for passengers
How is the Premium Calculated for Own Damage Insurance?
1. Insured Declared Value (IDV) of the car
2. Depreciation charges
3. Cost of 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
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
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
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.
