Stand-Alone Own Damage Car Insurance in the UAE

Third-party car insurance is the minimum requisite for every vehicle on roads. But this type of insurance compensates for other party’s damages only. Meaning, this mandatory insurance plan may keep you safe from paying out money to other drivers in an at fault accident. Third party insurance does not cover for damages caused to your own car. This gives rise to the need for an insurance plan that covers the cost of repair for damages incurred by your own vehicle. Stand-alone own damage insurance coverage is the plan that comes to your rescue in such situations. 

What Is Own Damage Car Insurance?

As the name suggests, own-damage car insurance plans are designed to cover the repair expenses for damages incurred by your own car. Think of third-party liability car insurance plans and comprehensive plans. Own damage car insurance plans fall somewhere in between both these types. A comprehensive car insurance plan is made by combining own damage and third-party insurance. Having just own damage car insurance cover for your vehicle means that your insurance provider will not cover for the damages caused to the third-party car or the driver. This is why own damage car insurance is always bought in combination with third-party car insurance plans. You can get third-party car insurance as a stand-alone plan, but that’s not the case with own damage insurance cover.

 

How Does an Own Damage Car Insurance Plan Work?

The procedure is pretty simple. Own damage insurance coverage and third-party liability cover come together to create a comprehensive car insurance coverage for your vehicle. In case of an accident, the third-party car insurance plan deals with the damages incurred by the other driver and vehicle while own damage insurance coverage takes care of your own vehicle. You will have to submit two separate claims for each of these plans. Your vehicle is covered for all basic benefits that a comprehensive car insurance plan provides for your cars. Basically, own damage insurance plans are comprehensive car insurance plans minus the third-party liability cover. 

Who Is It Designed for?

You may be wondering why should you opt for an own damage car insurance plan if you have the option of comprehensive car insurance plans. To your surprise, there can be several situations where you might want to reconsider your choice of insurance. Following is a list of circumstances when own damage insurance coverage will serve you well:

• You bought third-party liability insurance but halfway through the tenure, you found you need your own damage cover as well. 
• You bought a third-party liability cover from your current provider but do not like the make-up of their comprehensive plans. 
• You need your own damage protection only for a short period and do not want to invest in a huge comprehensive policy. 
• You are looking for a more flexible coverage that can be moulded in any way you see fit. 

Inclusions of Own Damage Car Insurance Plans

• Damages caused to own vehicle in an accident 
• Damages caused by man-made disasters such as vandalism and riots
• Damages caused by natural disasters such as storms
• Theft of the car or total loss due to unrepairable damage
• Protection against damages due to fire, explosion, self-ignition and other similar perils

Add-Ons Available with Own Damage Insurance Coverage

• Engine protection cover
• Geographical extension cover
• No depreciation cover 
• NCB retention cover 
• Car accessory protection cover 
• Personal accident cover for driver 
• Personal accident cover for passengers
• Consumable items cover
• Key replacement cover
• Windshield protection cover
• Off-road driving cover
• Daily cash allowance cover
• Courtesy vehicle cover
• Return to invoice cover

Exclusions of Own Damage Insurance Coverage 

• Third-party liabilities including vehicular damages and injuries of the third-party driver
• Electrical or mechanical breakdowns
• Damages caused when driving under the influence of drugs or alcohol
• Damages caused by wars or war-like conditions
• Damages caused when driving without a valid license or permit
• Consequential damages incurred by the car – i.e., further damages caused to the car because previous damages were not repaired on time 
• Damages caused due to negligence of the driver
• Normal wear and tear of the car
• Private cars being used as commercial vehicles

How Is Own Damage Premium Calculated?

Three main factors are considered when calculating the premium of own damage insurance plans. These include – IDV i.e., insured declared value of the car, depreciation and add-ons. Insured declared value is calculated by subtracting depreciation from the showroom price of the car. IDV is then multiplied by the premium rate of the insurance plan. Then, the cost of add-ons taken is added to this amount. Discounts, if any, are subtracted from the amount obtained after the last step. The final amount is your premium. Following is the formula version of this calculation:

IDV = (Showroom price – the depreciation applicable on the car) + (Price of car accessories – depreciation applicable)

Own Damage Insurance Coverage Premium = (IDV x Premium Rate of the Plan) + Price of the Add-Ons – Any applicable discount

Eligibility Criteria to Buy Own Damage Car Insurance

If you are a UAE citizen or resident with valid identity proof such as passport, resident’s visa and emirates ID, you can buy any car insurance plan you want. You must also have all your car related documents with you. Apart from the basic eligibility requirements, you must already have a valid third-party liability insurance plan to buy a stand-alone own damage car insurance in the UAE. Since third-party liability insurance is mandatory and own damage car insurance won’t cover it, every applicant must have separate coverage for it. 

Factors That Affect Own Damage Insurance Cover Price

As mentioned earlier, there are three main factors that affect the price of an own damage car insurance plan – the IDV of the car, the age of the car and location. Premium is decided mainly after considering these three factors. However, some other factors can influence the premiums as well. Given below is the complete account of all the factors that affect own damage insurance coverage premiums:

• Value of the Vehicle: As a rule, the higher the Insured Declare Value of your car, the higher insurance premiums are going to be. Cars that cost more also attract more expensive insurance plans because their repairs are expensive too. So, if the value of your car is higher, premiums would be higher too. 
• Model and Age of the Car: Even though older cars are at a higher risk of breaking down, the depreciation that applies over the years lowers IDV and hence the premiums. If your car is in good shape but old, you may get lower premiums for your car. 
• Geographical location: The place you are driving your car is also of great importance. Areas prone to accidents attract higher premiums. A fitting example here can be urban areas with high population density. 
• Add-Ons on the Policy: While add-ons do not affect the base premium amount of the insurance plan, they do influence the final amount. The more add-ons you have in your own damage car insurance plan, the higher the final price would be. 
• No Claim Bonus: A policyholder with a high no claim bonus amount will have a lower premium as compared to others. No claim bonus in car insurance plans can be used to lower the premium amount up to 50% of the original cost. 
• Safety Features of the Car: Installing safety devices in your car can lower the premium amount significantly. For example, installing an anti-theft device to lower the risk of theft and burglary and hence lowering the premium amount simultaneously. 
• Fuel Type: Cars that run on most commonly used fuels get lower premiums since the upkeep is cheaper for them. Whereas cars that use alternative fuels such as CNG, diesel or electricity get higher premium amounts.

Third-Party Liability Vs Own Damage Vs Comprehensive Car Insurance

Third-Party Liability Insurance	Own Damage Insurance	Comprehensive Insurance
Deals with third-party vehicular damages and injuries only	Deals with damages incurred by own vehicle	Covers both third-party liability and damages incurred by own vehicle
Is a mandatory coverage in the UAE	Optional coverage	Optional coverage
Can be bought as a stand-alone cover	Cannot be bought as a stand-alone cover	Can be bought as a stand-alone cover
Most affordable insurance plan of all	Affordable but more expensive than third-party only covers	The most expensive but wholesome variant
Premium is not affected due to depreciation in value of vehicle	Depreciation affects the premium price	Depreciation affects the premium price
No option to get add-ons	Can get any available add-ons	Can get any available add-ons

Tips to Find Cheap Own Damage Insurance Coverage 

There are several ways you can save on the premium of your own damage insurance plan. Given below are the top ways for you to lower the premium and score an affordable own damage car insurance plan:

• Take Higher Deductibles: Higher deductibles in an insurance plan reduce the liability on the part of the insurance company. Decreased liability means lesser risk for the insurance providers and hence lower premiums on the plan. So, if you can, opt for a higher deductible in your car insurance plan, as high as you can afford to pay if you make a claim. 
• Avoid Making Small Claims: Submitting claims for every small repair may end up costing you more in the long run. You lose your no claim bonus if you make even a single claim in a year, no matter how big or small it is. So, you can try and skip claiming for repairs that are minor. 
• Accumulate No Claim Bonus: Try your best to accumulate a maximum no claim bonus on your plan. It will help you cut the cost of the premium to a great extent, up to 50% in some cases. Get familiar with the no claim bonus policy of your provider beforehand to plan your claims accordingly. 
• Shop Online: Coming across discounts on own damage insurance coverage, or any other type of insurance for that matter, is very rare. But you can always count on finding discounts on plans bought online. Since most providers are digitizing their shopping experience, they provide discounts on plans that are bought online. Keep an eye out for such deals and grab them when you can. 

Own Damage Claim in Motor Insurance

Submitting a claim for your own damage insurance coverage is just like any other type of car insurance plan. Follow the below-given steps to submit a claim against your own damage car insurance plan:

• Contact the insurance company as soon as possible when you get into an accident or any other situation that caused damage/total loss to the vehicle. Examples can be theft, riots, storms, etc.
• Inform the company about the situation. Give an honest account of the incident and do not hide necessary details to avoid claim denials.
• Call the police and have an official report filed for the accident. Call an ambulance if there are any injuries sustained by you, the other drivers or the passengers. 
• Raise an official claim request by submitting the claim form, police report, car registration details and other required documents. If possible, submit your personal account of the accident 
• The insurance company will help you transfer the car to a network garage and examine the claim. 
• A damages inspector may come to check the incurred damage by the vehicle. 
• Repairs will begin as soon as the claim has been approved. 

Own Damage Car Insurance FAQs