Own Damage Cover for Motor Insurance: What is It, and Why’s It So Important

While buying motor insurance, one of the biggest questions that most people have is: What’s the difference between own damage and third-party covers, and what should one opt for? Well, today you’re going to understand just this, and by the end of this article be able to choose a motor insurance cover that suits you best.

By law, every vehicle plying on Indian roads needs to have a valid insurance policy. Minimal legal compliance entails opting for a third-party cover. A third-party cover in a motor insurance policy is meant to compensate other road users affected by an untoward incident involving your car.

To illustrate how a third-party cover works, assume that your vehicle is involved in an accident that injures a pedestrian. The injury may require hospitalization that could mean major expenses for you. In such a scenario, the third-party car insurance will kick in and compensate the pedestrian. *

Now, let’s consider another situation, where a heavy gust of wind has led to a tree falling on your car, and damaging it massively. If you merely have third party cover on your motor insurance, the insurance company will not compensate you for the severe damage that the falling tree has caused to your car. Instead, you will have to spend your own money to get your car fixed.

Is there an alternative to a third party cover that will compensate you when a tree falls on your car? Well, there certainly is, and it’s called ‘own damage’ cover. *

Unlike the third-party cover, the own damage cover is a lot more comprehensive when it comes to covering your vehicle for damage caused by natural calamities such as floods, heavy winds and so on. Own damage cover will also compensate you in case your car is crashed into by some other vehicle on the road, or if you happen to get into an accident leading to damages to your car. So, the own damage cover is the wise thing to opt for, over and above the third-party cover (which gives you minimum legal compliance) to ensure that you’re financially protected against any untoward incident that may occur on the road. Furthermore, various add-ons such as zero depreciation, engine protect plus, key loss protection, and roadside assistance covers can be added to the own damage cover, making your motor insurance policy quite comprehensive. *

To summarize, third party cover component in motor insurance is significantly cheaper than own damage cover and offers minimum legal compliance. However, it doesn’t cover your vehicle comprehensively and can be risky in situations where you’re suffering a major loss due to an untoward incident on the road. Own damage cover in motor insurance is costlier than third party cover but protects your interests significantly and insures you against large financial losses that may arise after an accident. Clearly, opting for the ‘own damage cover’ in addition to the third-party cover (that’s anyway mandated by law) is the wise thing to do while purchasing motor insurance. *

*Standard T&C apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.