In the past week, two major fire incidents in Bengaluru and Chennai led to almost 350 cars being burnt down. While the insurance claims of the cars damaged are still being assessed, the number of cars having own damage (OD) motor covers are minimal.
In the motor insurance parlance, there is a motor own damage cover and motor third party cover. Own damage refers to insurance taken for any external and internal damages to one’s own car while a third party cover includes insurance taken against third party liabilities.
According to Indian laws, taking a motor third party insurance is mandatory for all vehicles running on Indian laws. However, an OD cover is not compulsory and cannot be brought on a standalone basis.
Having an OD cover is beneficial because this cover can help recover the costs of one’s vehicle if it is damaged in an accidental incident like fire. Only if it was a deliberate attempt to damage the car/bike by an owner is the insurance not payable.
OD covers that come as a part of a comprehensive motor package are expensive since they are dependent on the type of the car and how old it is. Sedans and SUVs have a higher premium than hatchbacks.
Most car-buyers take a loan before buying the vehicle. Fire-Related damage often means that the entire vehicle would need to be replaced and this would be a costly affair. Especially for owners of multiple vehicles, some of which may be lying in a parking lot, having an insurance cover is vital.
Buying a comprehensive long-term cover would help protect against fire, theft and other accidental damages at an effective price point. When you can save up and buy a vehicle of your dreams, it is imperative that you take both OD and third party insurance with it for your peace of mind.