Is It Possible To Shift From A Third Party Plan To An Own-Damage Plan?
Updated On Oct 15, 2023
A third party car insurance plan can not be shifted to an own-damage car insurance policy. However, you will have to buy a standalone own-damage insurance plan. Let’s discuss some information about the own-damage insurance.
In India, every car owner is required to hold at least a basic car insurance i.e., the third party car insurance policy. It has been declared mandatory to carry while driving by the Insurance Regulatory and Development Authority of India (IRDAI). This insurance cover is designed to cover the financial liabilities of policyholders towards a third party but offers no coverage for the insured car or individual. This inadequate coverage arises from the necessity of owning an own-damage car insurance cover. But shifting from a third-party car insurance cover to an own-damage cover is not possible, therefore, you will have to purchase a standalone own-damage insurance policy to avail its benefits.
Factors Affecting the Premium of Standalone Own-Damage Car Insurance
The premium cost of a standalone own-damage car insurance cover is higher than that of third party car insurance. However, the premium of the third party plan is fixed by the IRDAI, while the premium of own-damage cover varies from insurer to insurer based on various factors. Here are some factors which can affect the premium of your standalone own-damage car insurance.
Insured Declared Value (IDV)
The Insured Declared Value is the present market value of your car, which is the same amount that your Car insurance company will be entitled to pay you in case of a total loss. It is a significant factor that determines the premium of own-damage car insurance. The higher the IDV value will be, the higher the premium amount you will have to pay.
Engine’s Cubic Capacity
The cubic capacity of your car’s engine directly impacts the speed of your car. However, with a higher cubic capacity higher risk of any car accident is associated due to which, the insurance company will charge a higher premium for the own-damage car insurance. In short, a car with a higher cubic capacity will attract a higher premium cost.
Model of Car
The type of the insured car and its model are also significant factors which influence the premium calculation of your standalone own-damage car insurance policy. If the insured car is high-end, then consequently a higher amount of premium would be for your own-damage car insurance plan.
Age of Car
Over time, every car tends to lose its value in the market due to default depreciation. Therefore, the age of your car is also considered a crucial element at the time premium amount calculation for the own-damage car insurance plan. In simple terms, the older your car will get, the lower your own-damage car insurance premium will be.
The add-on covers are available with a specified amount associated with it. The premium cost of all the car insurance add-ons will have to be paid by the policyholders to avail them during their policy term. Hence, the amount of premium of your own-damage plan is directly affected by the type and number of add-on covers chosen by you for your own-damage insurance policy.
No Claim Bonus (NCB)
Every policyholder of an own-damage car insurance plan is rewarded with a No Claim Bonus (NCB) at the time of renewal for not making any claim in the previous policy term. Hence, during the time of renewal, your own-damage car insurance premium could get lower due to the implication of the NCB discount.
Benefits of A Standalone Own-Damage Car Insurance Policy?
Standalone own-damage car insurance comes with a host of benefits. Apart from getting extensive insurance coverage for your car, here are the advantages of having the own-damage insurance cover:
Option to Opt for Different Insurers
With the option to buy a standalone own-damage car insurance policy in addition to the third party car insurance, the car owners can now choose a third party and an own-damage insurance cover from different car insurance companies of their own choice based on their budget and needs.
Economical Car Insurance
With the segmentation of a long-term comprehensive car insurance policy into long-term third party insurance and short-term standalone own-damage insurance, the insurance covers have now turned up to be an affordable purchase for policyholders. It allows the policyholders to buy their own-damage policy from the insurers providing the most economical insurance car insurance plans.
No Compulsion for Long-Term Covers
With the introduction of standalone own-damage car insurance cover, car owners are not bound now to buy a long-term comprehensive insurance cover due to the compulsion of owning a long-term third party car insurance plan. In fact, now they can hold a third party car insurance policy of 5 years and a standalone own-damage car insurance plan of 1 year that they can renew yearly.
A third party car insurance plan can not be shifted to an own-damage car insurance policy. However, to protect your car, you will have to buy a standalone own-damage insurance plan. Therefore, we have tried to disseminate some important information about own-damage insurance. We hope that the above-mentioned details will help you in selecting the best insurance plan for your car.