Definition
Own-Damage Cover
Own-damage (OD) cover compensates for damage to or loss of the insured's own vehicle from accidents, theft, fire and natural calamities.
OD is the optional but valuable part of motor insurance that pays for repairs to the policyholder's own car or two-wheeler. Since 2019, IRDAI has allowed standalone own-damage policies, letting owners hold long-term TP separately and renew a one-year OD policy each year for flexibility.
The OD premium is risk-priced by the insurer using the vehicle's IDV, age, make, location and the owner's claim history (NCB). OD claims are subject to depreciation on parts unless a zero-depreciation add-on is bought.
Related terms
- Third-Party InsuranceThird-party motor insurance covers the policyholder's legal liability for injury, death or property damage caused to others, but not damage to the insured's own vehicle.
- Zero Depreciation CoverZero depreciation (also bumper-to-bumper) is a motor add-on that waives depreciation on replaced parts, so the insurer pays the full cost of new parts in an own-damage claim.
- Insured Declared Value (IDV)Insured Declared Value is the current market value of a vehicle fixed at policy inception, representing the maximum the insurer will pay on theft or total loss.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.