Standalone Own Damage Policies:

Motor insurance in India has traditionally been sold as either Third-Party (TP) Liability-only policies (mandatory under law) or Comprehensive/Package policies (covering both TP and Own Damage). But with regulatory reforms, insurers are now allowed to offer a third option—Standalone Own Damage (OD) Policies.

For sales professionals, this is an important product innovation to understand and explain to customers.

🚗 What is a Standalone Own Damage Policy?

A Standalone OD Policy covers damage to the insured’s own vehicle due to:
- Accident, collision, or overturning.
- Fire, explosion, lightning, self-ignition.
- Theft or burglary.
- Natural calamities like flood, cyclone, earthquake, landslide.
- Transit damage (road, rail, inland water, air).
It does not cover third-party risks. The customer must already have a valid TP policy (as mandated by the Motor Vehicles Act, 1988).

👉 In simple terms: It’s an add-on protection for the owner’s vehicle, separate from third-party liability.

📜 Why Was it Introduced?

Earlier, customers had to buy comprehensive policies to get OD cover.
With IRDAI reforms post 2019, insurers were allowed to offer OD-only policies for cars and two-wheelers, provided the customer already holds a valid TP cover .
This provides flexibility and choice to customers, especially those who want to mix products from different insurers.

🔑 Key Features of Standalone OD Policies

Eligibility – Vehicle owner must have a valid third-party liability policy in place.
Flexibility – Customers can buy TP and OD policies from different insurers.
Customization – Add-ons like Zero Depreciation, Engine Protect, Roadside Assistance, NCB Protection can be attached.
Annual Tenure – OD policies are usually issued for one year (unlike long-term TP policies available for new vehicles).
Premiums – Determined by factors like IDV (Insured Declared Value), vehicle age, model, usage, and geography.

❌ Exclusions to Remember

Normal wear and tear, mechanical/electrical breakdown.
Driving without a valid license.
Damage when used outside geographical area.
Consequential loss (indirect damage).
Driving under the influence of alcohol/drugs .

💡 Why Agents Should Care

Cross-Selling Opportunity – Customers with long-term TP policies (e.g., 3 or 5 years) for new vehicles may still need annual OD policies.
Customer Flexibility = Better Sales – Agents can pitch competitive OD covers from insurers offering better service or add-ons.
Education Builds Trust – Many customers don’t understand that TP ≠ full protection. Explaining OD cover bridges this gap.
Upselling Potential – Add-ons in standalone OD policies increase customer satisfaction and agent commissions.

✅ Conclusion

The Standalone Own Damage Policy is a smart product that gives customers choice, flexibility, and protection. For insurance agents, it’s a great way to tap into a large customer base that may already have TP insurance but not full coverage for their own vehicle.

👉 Your pitch can be simple: “You already have third-party insurance for legal compliance. But who pays for YOUR car’s damage? That’s where a standalone OD policy steps in.”