Difference Between Own Damage and Third-Party Insurance: What Every Car Owner Should Know

When you buy or renew car insurance, you may hear many terms that sound complicated or technical at first. Two of the most common are Own Damage (OD) and Third-Party (TP) insurance. At first glance, the terms "own damage" and "third-party" may seem like overcomplicated terms, but it's very important to know the difference if you want to protect your car properly.

This information is important to know whether you're buying a car for the first time or going over your current insurance. What these covers mean, how they work, and most importantly, how they affect your financial safety and legal obligations on the road.

Own Damage and Third Party are two types of car insurance. This blog will explain what they are, the risks they cover, and how to choose the best one (or both) for your car and way of life.

What is Third-Party (TP) Insurance?

Third-party insurance is the minimum legal requirement for driving a car on Indian roads, as per the Motor Vehicles Act.

It covers:

●      Injury or death of a third party

●      Damage to third-party property (such as another vehicle or a boundary wall)

It does not cover any damage to your vehicle.

Think of third-party insurance as your car’s liability shield; it protects you financially in case someone else is harmed or their property is damaged because of your car.

What is Own Damage (OD) Insurance?

Own damage insurance is an optional cover that protects your vehicle from risks like:

●        Accidents and collisions

●        Theft or burglary

●        Fire and explosion

●        Natural calamities (floods, earthquakes, etc.)

●        Man-made disasters (vandalism, riots)

Own Damage insurance is an optional cover that can only be purchased alongside a Third-Party policy. This type of cover ensures that damage to your car doesn’t turn into a major financial setback.

Own Damage vs Third Party Insurance: Key Differences at a Glance

Third-Party (TP) Insurance

●        Mandatory by law

●        Covers injury/death of third parties

●        Covers damage to third-party property.

●        No cover for your car’s damage

●        Lower premium

Own Damage (OD) Insurance

●        Optional but highly recommended

●        Covers damage to your car from accidents, theft, fire, etc.

●        Includes protection from natural and man-made calamities

●        It can only be purchased with the TP cover.

●        Slightly higher premium

Why Does the Difference Matter?

Many new policyholders ask, "What are Own Damage and Third Party in car insurance, and which one should I get?"

The answer lies in what you want your policy to protect:

●        If you only purchase third-party insurance, you will have legal liability coverage, but you will be responsible for any damages to your own vehicle.

●      With own-damage insurance added, you extend your protection to your car, not just others.

In short:
Third Party = Protects others from damages caused by you
Own Damage = Protects you from damage to your own car

Which One Should You Choose?

Choose a third party only if:

●      You have an older car with low market value

●      You're looking for minimum legal compliance

●      You're on a tight budget

Choose Own Damage + Third-Party (Comprehensive) if:

●      You have a new or mid-value car

●        You live in areas prone to accidents, theft, or natural disasters

●      You want financial peace of mind in case of unexpected damage

Did you know? You can further enhance your cover with add-ons like depreciation cover, engine protect, and roadside assist, but only with your damage or comprehensive policy.

Real-life Example

Let’s say your car collides with another vehicle. With Third Party insurance only, the insurance company will pay for the other person’s damage. You will personally cover the cost of your car's repairs. With Own Damage insurance, your insurer will cover your car’s damage too, depending on the policy terms.
Imagine a major accident or a natural calamity; the cost of repair or replacement could be huge. This is where the benefits of Own Damage cover become invaluable.

Final Thoughts – Choose the right plan

Third-party insurance ensures you’re on the right side of the law and protects you from financial liabilities towards others. But it doesn’t cover the cost of repairs or losses to your vehicle. That’s where own damage insurance steps in, offering a financial cushion against unforeseen events like accidents, theft, natural disasters, or even a case of bad luck. The ideal approach is to choose a plan that offers a balance of legal compliance, personal protection, and long-term value.

Because in the end, your car is more than just a vehicle, it’s your companion on the road. What truly matters is who you trust to protect your vehicle. That’s where Zurich Kotak General Insurance comes in. Backed by global insurance expertise and local insight, Zurich Kotak General Insurance offers car insurance plans that go beyond the basics, combining wide-ranging coverage, quick digital processes, and customer support that actually supports.