According to the Motor Vehicles Act 1988, all cars in India must be covered by valid third party cover, protecting the interests of third parties. This coverage pays for the liability that the car owner has to incur, in case the car injures or kills a third party, or damages a third party’s property. But there is no coverage provided by liability insurance for the car if it suffers damage. This is where Personal Damage auto insurance comes in.
Homeowner’s Damage auto insurance covers damage to the car due to natural or man-made causes, or in the event of theft. In such cases, own damage insurance covers the financial losses incurred by the car owner. Although basic car insurance refers to a liability insurance policy, it does not cover damage to the car.
Therefore, although third party coverage is essential, one should opt for Personal Damage auto insurance for comprehensive car coverage.
Advantages of car insurance in the event of personal damage
1. Full coverage: Whether the car suffers damage due to an accident, natural calamity or human causes, Owner Damage auto insurance compensates for it financially. The police reimburse the cost of repairing the car, including all minor and major damage. It’s great coverage to have for high-end luxury car owners due to its sky-high repair costs.
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2. Cover against theft: There is always the possibility of a car being stolen. In the event of theft, the car owner can lose a lot of money if the car is not recovered. The Own Damage policy pays a lump sum in the claim, allowing you to replace your stolen car with a new one.
3. Annual affordability: The Personal Damage policy is valid for one year, after which it can be renewed for continuous coverage. The annual policy has an affordable premium that allows you to be assured of comprehensive coverage.
4. Easy availability: A Personal Damage policy can be purchased online in a few simple steps. You can also compare different plans and policies in the market and select a policy that offers maximum coverage at the lowest cost.
5. Multiple add-ons: Homeowners damage auto insurance includes a wide range of optional coverage benefits called add-ons. They expand the scope of policy coverage at minimal costs. You can choose suitable add-ons, increasing coverage and claim amount. These add-ons also take care of any unfortunate damage through or to the car. For example: zero amortization cover, engine protection cover, claim-free bonus protection cover, roadside assistance cover, etc.
6. No Claim Bonus: If you make no claims in your policy, you are entitled to a no-claims bonus upon renewal. This bonus offers a discount on the renewal premium. It starts at 20% for the first claims-free year, then continues to increase after each successive claims-free year. Up to 50% discount can be used if no claims are made for five consecutive years.
7. Premium Discounts: When choosing the Homeowners Damage policy, attractive discounts are given to reduce the premium. In addition to the No Claim bonus, discounts are also given for installing safety devices, joining an automobile association, selecting a voluntary deductible, and more.
(By Venkatesh Naidu, CEO, Bajaj Capital Insurance Broking Ltd)