Did you know that the standard third-party motor insurance will not pay out if your vehicle is struck by a natural calamity like an earthquake, or by disasters such as riots or vandalism? To cover against such unfortunate instances, policy buyers had to opt for an additional cover under the tag ‘Own Damage’ (OD). The said cover had to be purchased in a bundled package from a third-party insurer.

From September 1, 2019, however, that will not be the case. The Insurance Regulatory and Development Authority of India (IRDAI) has directed all general insurance companies to offer OD cover as a standalone from the aforementioned date. In other words, buyers will have the option to purchase third-party insurance from one company and an OD cover from the same or another provider. This change comes on the back of an order passed by the Honourable Supreme Court of India last year. The said cover will be available for new and old two- and four-wheelers.

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The circular also read that a buyer seeking OD cover will have to provide valid third-party insurance to the insurer. For the time being, the OD cover will be provided on an annual basis at max. What that means is that if you want to renew or buy motor insurance on or after September 1, 2019, the insurance provider will offer third-party cover and OD cover individually. Buyers will also get the choice to cover their vehicle against fire or theft.

As far as the pricing for OD cover is concerned, that will remain the same as what is currently being offered in a bundled package. As before, to legally ply on Indian roads, any vehicle must have valid third-party insurance. OD cover, on the other hand, is not a mandatory component. In other words, the latter is an optional extra to bump-up the peace-of-mind factor.