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What is the difference between Own damage and Collision insurance?

When Sameer was buying an insurance policy for his car, he knew that third-party insurance is mandatory and he needs to get that coverage. However, other coverage options for car insurance like Own damage and Collision insurance was really difficult for him to understand. In this article, we’ll discuss the differences between Own damage and Collision insurance.

Collision insurance and own damage insurance claim are two types of car insurance coverages. Both are legally optional and pay for the cost of damage to their own car, but do so in different situations. Collision insurance and own damage insurance work to repair or replace most types of damage to a car. 

However, for other vehicles they don’t pay for any damage, or for injuries. Both these types of car insurance are common and give protection when a vehicle is damaged. The types of damages covered by collision insurance and own damage are very different. Thus, it is very important for our readers like Sameer to understand the benefits offered by both types of insurance policies.

What is Collision Insurance?

Collision car insurance is a type of insurance that covers you in a crash or accident with another vehicle or object if a car needs to be repaired. While this collision car insurance covers a wide range of accidents. It includes full repairs or replacement of covered vehicles. 

What is Own Damage Insurance?

Own damage car insurance is a type of insurance that covers a useful form of insurance protection, as it safeguards the insured vehicle from damages. It is also mentioned as collision insurance or self-damage insurance by some. Own damage insurance claim includes coverage for damage to the insured vehicle in accidents and theft/total loss.

Factors to consider for Both Insurance

Both collision insurance and own damage insurance coverage are necessary. In order to decide if you need collision insurance and own damage insurance, determine the following:

  • The value of your car – Knowing how much your car’s value is important. Is your car higher in value or new? If both collision insurance and own damage insurance coverages could save you in the event, your car needs to be repaired or replaced.
  • Risk of an accident – This depends on how often you drive your car and how far. If you have a long drive frequently, on average the risk may be higher.
  • Your current savings – Your savings cover all the costs of an accident out of pocket. Do you have the money to replace it if your car were stolen?
  • Your area – Consider the area where you drive most and where you live.

What are the benefits of Own Damage Car Insurance?

  1. New car owners do not buy a long-term comprehensive car insurance policy to meet the mandatory requirement of 3-year third party car insurance cover. In an own damage car insurance policy, policyholders choose 3 years for a third party car insurance plan alongside an own damage insurance plan for 1 year and renewed on a yearly basis.
  2. With the order from the Insurance Regulatory and Development Authority of India (IRDAI), they offer the car owners to buy their own damage policy cover other than a third party liability cover, which means that the car insurance policyholders are allowed to choose for different car insurance companies for both the covers.
  3. With the availability of own damage car insurance policy and third-party liability separately covered, for car owners, car insurance policies have now become much more affordable. Moreover, now at the best price, the policyholders buy their own damage insurance policy to add-on to their financial benefit.

What are the benefits of Collision Insurance?

  1. About high repair costs, you would be not able to give repair costs or if you clearly value peace of mind after an accident.
  2. If you have collision insurance, you can typically start the repair process very soon after a crash. You may need to wait for the insurance companies to determine who was at fault if you’re counting on the other driver’s liability coverage to pay for the damage. If a collision claim is filed, it is considered that the other driver’s liability coverage should pay later and you’ll generally be refunded automatically.
  3. With your own insurance company deal rather than another insurer to pay for your claim with less incentive. In most cases, Collision insurance can also be used for a rental car, which can afford you from having to purchase rental car insurance.

What does Own Damage Insurance cover?

Mentioned below are covered in own damage insurance-

  • Accidental damage
  • Fire & Explosion
  • Natural Calamities
  • Man-made Calamities
  • Theft/Malicious Acts
  • Total Loss

What does Collision Insurance cover?

Mentioned below are covered in collision insurance-

  • Accidents involving another vehicle
  • Collisions with a tree, fence, or guardrail
  • Vehicle flipping
  • Road hazards caused damage such as potholes

What is not covered in Own Damage Insurance?

These are not covered in the own damage car insurance-

  • Third-party Liabilities
  • Driving Drunk
  • Driving without a Licence
  • Add-Ons Not Bought
  • Consequential Damages
  • Contributory Negligence
  • Driving without a Licence Holder

What is not covered in Collision Insurance?

These are not covered in the collision car insurance-

  • Hail, fire, or flood damage
  • Medical expenses for any accident
  • Damage to another person’s property
  • Theft or vandalism damage


It all depends on you what kind of coverage and protection you want for your vehicle coverage. At the time of claim, the total amount of coverage will depend on the specified conditions in the policy and also your insurance plan. Every year the extent of coverage and the value of the vehicle depreciates. Choose the best insurance policy and protect yourself from unexpected accidents.

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