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How Metro Cities are Driving the Demand for Own Damage Insurance?

Urban areas in India generally face the most number of accidents on the road. In 2022, more than 1.7 lakh road accidents happened in urban India. As vehicle sales continue to rise, the need for vehicle insurance is also increasing...
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Urban areas in India generally face the most number of accidents on the road. In 2022, more than 1.7 lakh road accidents happened in urban India. As vehicle sales continue to rise, the need for vehicle insurance is also increasing to protect oneself during accidents on the road.

Among the different categories of vehicle insurance in the country, own damage insurance is slowly gaining popularity among drivers. In this blog, we will cover the major factors which are leading to a rise in the purchase of own damage insurance in the country.

Factors Influencing Demand for Own Damage Insurance in Urban  Areas

Here are the major factors influencing people to buy own damage insurance in urban India:

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1.     Increased Traffic

Metro cities have congested roads and unpredictable traffic, leading to a greater risk of road accidents. To ensure financial security in such situations, own damage insurance is essential. It provides coverage for any damage your vehicle may suffer.

2.     Natural Disasters

Urban areas often face challenges like flooding and waterlogging. It can cause extensive damage to vehicles parked on the streets or in basements. The increasing frequency of such natural disasters has prompted car owners to seek their own damage insurance.

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3.     Theft and Vandalism

The risk of vehicle theft and vandalism is notably higher in urban areas. With a higher concentration of vehicles and a rise in crimes, metro cities see increased rates of theft and harm to vehicles. Own damage coverage protects against losses that third-party liability insurance does not cover.

4.     Lack of Parking Space

Limited parking space often forces drivers to park in vulnerable locations. The limited availability of underground and multi-level parking in urban areas compels vehicle owners to rely on street parking or occupy public spaces. This situation inevitably contributes to heightened traffic congestion and raises the risk of accidents.

It increases the risk of damage from falling branches or accidents caused by other vehicles. This underlines the need for own damage insurance that includes protection against such damages.

5.     Risk of Minor Accidents

In city traffic, vehicles often move slowly. It increases the chances of experiencing a minor accident. It is typical to encounter situations like scratches and clipped mirrors while navigating through crowded streets.

6.     Faster Wear and Tear of Vehicle Parts

Driving in urban areas requires a lot of stopping and starting, waiting in traffic, and manoeuvring around potholes and speed bumps. This type of driving demands continuous steering, braking, clutch control, and gear shifting. As a result, vehicle components can wear out quickly, leading to the need for regular maintenance and part replacements.

7.     Costly Repairs

Running a business in urban areas comes with significantly higher expenses, particularly in terms of labour and overhead costs. As a result, even minor repairs at a garage can add up quickly, leading to substantial bills over time. But if you renew bike insurance, you will be protected from such costs.

8.     Regulatory Compliance

Third-party liability insurance is mandatory in India; however, many drivers opt for comprehensive coverage that includes their own damage protection to avoid financial loss that comes with inadequate coverage.

Add-Ons Worth Considering in Own Damage Insurance

Following are some of the add-ons you can buy with your own damage insurance:

1.     Zero Depreciation Cover

This additional coverage guarantees that the insurance company will not subtract the depreciation of car components from your claim. As a result, you receive a larger payout, which can help you save money in areas where spare parts are costly.

2.     Consumables Cover

Items that are regularly used in a vehicle, like bearings, oil filters, nuts and bolts, and lubricants, tend to wear out over time. The consumables add-on provides coverage for the expenses associated with replacing these components during repairs.

3.     Roadside Assistance Cover

This feature helps you in case your vehicle experiences a breakdown on the road. Available services cover jump-starting batteries, delivering fuel, changing flat tyres, and towing your car.

4.     Engine Protection Cover

The engine protection add-on safeguards against damage to the engine. With this additional coverage, you are protected against expenses arising from engine damage.

5.     Key Replacement Cover

Losing, misplacing, or damaging your car keys can cost you some money. A key replacement cover can help alleviate these worries by covering the expenses of replacing your car keys and even the cost of installing a new lock if necessary.

6.     No Claim Bonus (NCB) Protection

Making a claim can result in the loss of your NCB discount when renewing your vehicle insurance. However, by opting for this add-on coverage, you can protect your NCB, ensuring that it remains unaffected even if you file a claim during the policy term.

Bottom Line

In conclusion, fast-paced urban life has made damage insurance indispensable. As cities continue to expand and traffic congestion worsens, the demand for insurance coverage will grow further. By investing in adequate insurance, you can safeguard your vehicles and mitigate potential financial risks. It ensures peace of mind in an increasingly uncertain urban environment.

Disclaimer: This article is part of sponsored content programme. The Tribune is not responsible for the content including the data in the text and has no role in its selection.

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