What Is Own Damage Premium In Car Insurance?

Having car insurance is a must for every vehicle owners, be it a car, bike or any other form of motor vehicle. It’s a mandatory requirement and can be quite confusing for many who are not familiar with the terms and conditions of the policy. One such term is the own damage premium.

Own damage premium is the amount of money you pay to the insurance company for covering any damage caused to your vehicle due to an accident, theft, fire, or any other reason. This premium is separate from the third-party liability premium, which covers damage caused to another person or property, which is often mandatory in India. The own damage premium is not mandatory, but it is highly recommended for all vehicle owners.

Why Is Own Damage Premium Important?

Own damage premium is important as it allows you to cover the expenses of repair or replacement of your vehicle in case of an accident or theft. It also covers the cost of any medical expenses that may arise as a result of the accident. It is important to remember that the own damage premium is separate from the third-party liability premium and therefore it is important to have both so that you are adequately covered.

How Is Own Damage Premium Calculated?

Own damage premium is calculated based on several factors, such as the make and model of the vehicle, the cubic capacity of the engine, the age of the vehicle, the geographical area of registration, the type of coverage chosen and the No Claim Bonus (NCB) offered by the insurance company. NCB is a discount offered by the insurance company if you have not made any claims during the policy period.

The own damage premium also depends on the type of coverage chosen. A comprehensive policy gives you the highest coverage and therefore the own damage premium is higher than the other types of policies. However, if you opt for a third-party liability policy, the own damage premium is much lower.

What Are The Benefits Of Own Damage Premium?

The biggest benefit of having own damage premium is that it helps you reduce the risk of heavy financial losses in case of an accident. It also helps you get a quicker and hassle-free claim settlement procedure. It also helps you lower the overall cost of your car insurance policy. With the own damage premium, you can also get the benefit of discounts and cashless claims at a network of garages.

Conclusion

Own damage premium is an important component of car insurance and it pays to be aware of it. It is important to understand the coverage and the discounts that are available so that you can make an informed decision. It is also important to compare the different policies from different insurance companies to find the best deal.