An own damage (OD) insurance policy can be purchased as a standalone policy or as part of a comprehensive car insurance policy to get all-around protection. This cover offers coverage for damage caused to your car by external forces like accidents, collisions, natural disasters, fires, etc.
This article discusses the car insurance own-damage premium calculation process and the factors affecting OD premiums.
How to Calculate Own Damage Car Insurance Premium?
The following formula is used for own damage premium calculation:
Cost of Premium = IDV x Premium Tariff Rate – (Discounts + NCB) + Cost of Add-On Covers
You can alternatively use a car insurance calculator to calculate the premium amount, which most trusted insurers provide for free on their website.
Factors that Affect Car Insurance OD Premium
Premium Tariff Rate
The Tariff Advisory Committee (TAC) is responsible for controlling and regulating the rates, advantages, terms and conditions offered by general insurers. This is the rate at which the policy premium is payable.
| Car’s Age | Zone A | Zone A | Zone A | Zone B | Zone B | Zone B |
| Less than 1000 Cubic Capacity | More than 1000 Cubic Capacity but less than 1500 Cubic Capacity | More than 1500 Cubic Capacity | Less than 1000 Cubic Capacity | More than 1000 Cubic Capacity but less than 1500 Cubic Capacity | More than 1500 Cubic Capacity | |
| Less than five years | 3.127% of IDV | 3.283% of IDV | 3.440% of IDV | 3.039% of IDV | 3.191% of IDV | 3.343% of IDV |
| More than five years but less than ten years | 3.283% of IDV | 3.440% of IDV | 3.612% of IDV | 3.191% of IDV | 3.351% of IDV | 3.510% of IDV |
| More than ten years | 3.362% of IDV | 3.529% of IDV | 3.698%of IDV | 3.267% of IDV | 3.430%of IDV | 3.596% of IDV |
Insured Declared Value
This is the maximum amount that the insurer will pay if your car is totally damaged or stolen. IDV is calculated based on the car’s market value at the time of purchasing the policy and renewal.
In the case of new cars, the IDV is based on their ex-showroom prices, and for cars that are older, the prices are based on their depreciated value as listed below:
| Car’s Age | Depreciated Value (in percentage) |
| Less than 6 months | 5% |
| 6 months – 1 year | 15% |
| 1 year – 2 years | 20% |
| 2 years – 3 years | 30% |
| 3 years – 4 years | 40% |
| 4 years – 5 years | 50% |
No Claim Bonus and Other Discounts
An NCB discount is applicable to your own damage policy premiums at the time of renewal if you have not made any claims in the previous policy year.
Consecutive NCB discounts over the years can reach up to 50%, which can effectively lower your car insurance OD premium costs by a large margin.
Insurers offer a fixed discount if you’re a member of the Automobile Association of India (AAI) or Western India Automobile Association (WIAA). You can also enjoy a 2.5% discount on premiums if you choose to install ARAI-approved anti-theft devices on your car.
Conclusion
Keeping all these factors in mind will help you be better prepared financially as to how much budget you need to allocate towards your policy premium. If you’re looking to save on car insurance OD premiums, it’s also recommended to buy your policy from an online insurer since online plans happen to be cheaper and offer more discounts.
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