Come September 1, motor vehicle owners will be allowed to purchase standalone own damage (OD) insurance cover. An OD cover insures the vehicle against theft and damages. The guidelines will be applicable for all new and old cars and two-wheelers. At present, the industry practice is to bundle OD insurance with third party (TP) insurance policy. TP liability insurance covers the insured if he is held legally liable for damages caused to a third party. But with this announcement by the Insurance Regulatory and Development Authority of India (Irdai), vehicle owners will be allowed more flexibility on two counts: Firstly, one could choose to buy an OD cover at a later date although it is not advisable, and second, they could buy this cover from a different insurer. TP insurance continues to remain mandatory for you to drive your vehicle on the road.
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