Many drivers who are looking to insure a new car are sure to come across various offers that include the Damage Proprietary Warranty and are not very clear what it means. But if we talk about All Risk Insurance , they may have a clearer idea of ​​what we are talking about. Although it is convenient to clarify the terms and know what relationship exists between this type of Auto Insurance and coverage. That's what this post is about.

Own Damage coverage is what makes the difference between an All Risk policy and an Extended Third Party Insurance . In fact, the coverage for Own Damage is exclusive to the Full Risk Insurance policies and cannot be contracted as an extra in other types of Insurance. However, Full Risk Car Insurance may include more coverage, in addition to Own Damage.

Having this protection covers the damage suffered by the vehicle in an accident in which no other vehicle is involved, but always within limits.

Although the name Own Damage may lead us to think that it also covers physical damage suffered by the driver, the truth is that it is a guarantee that exclusively covers material damage to the insured car. Driver injuries and injuries would be covered by Driver Insurance .

However, these insurances are not usually cheap, although they are highly recommended to insure new cars , up to two and three years old. Let's see specifically what covers Own Damage:

 

If our Auto Insurance includes Own Damage, we will cover the repair of damage caused to our own vehicle as a result of an accident.

 In these cases, the accident would be motivated by an external cause, produced instantaneously or violently and, in any case, completely beyond the control of the insured.

 

In this way, this warranty covers damage caused by ourselves to our vehicle.

For example, an exit from the road in which the car is damaged or those slight metal bumps or scratches that are so frequent when parking in a parking lot would be covered by this coverage. And in the same way, the Own Damage guarantee would respond in case of causing damage to our own vehicle in an accident for which we are responsible.

 

Another of the circumstances in which this coverage is activated is when we cannot claim the damages caused by a third party, because it is not identified. 

For example, if our car suffers vandalism (grated sheet metal, smashed rear view mirrors, or broken windshield wipers) and the person responsible cannot be identified, Basic Insurance would not cover this damage. With Own Damage coverage, the insurer assumes the repair of the vehicle in these situations.

 

Regarding the damages caused by meteorological circumstances, the Own Damage coverage covers hail , since the rest are usually covered by the Insurance Compensation Consortium.

 

One of the reasons that leads us to include the Own Damage guarantee in our policy is the fear of losing the car in an accident . Having an All Risk Insurance gives us the peace of mind of knowing that the insurer agrees to indemnify the total loss of the vehicle in an accident , although it is very important to keep in mind that not all insurers offer the same Own Damage coverage.

Knowing what compensation the insurer will pay if a total loss occurs is essential before signing a Self-Damage policy. Especially if the insured car has just been released.

The Own Insurances coverage offered by the best insurers normally offers compensation with a new value if the damaged vehicle does not exceed two years old. However, there are companies whose compensation is calculated according to the market value of the vehicle from the six months of its registration or from the day the car leaves the dealer. 

After that first or second year, depending on the case, the usual practice of some companies is to compensate based on the venal value and in other cases based on the improved venal value . If you want to know more about how Insurance calculates the value of cars, in this post we tell you what is the venal value and the new value .

An All Risk Insurance is the most complete policy to insure a car , a motorcycle or a truck. But there are always situations that escape the Insurance coverage, that is, exclusions. And Self Damage is no exception.

There are cases that the Own Damage coverage does not cover , either because it does not fall within the guarantee or simply because they are covered by other coverages or Insurance. Let's see some examples.

 

The Own Damage guarantee can get us out of a good bind on the road, but hiring this coverage does not mean that the insurer assumes the cost of any car repair.

Insurers differentiate between damage caused by an accident and what is a vehicle breakdown . Therefore, if an insured car has a fault in the steering or suffers an engine failure, the Insurance would not cover that repair.

But, if that failure in the steering causes an accident that generates damage to the vehicle, the thing changes. This would be covered by the Own Damage guarantee and the insurer would assume the repair of the car or the compensation for total loss, if the case arises.

 

Earlier we mentioned the damages to the vehicle caused by meteorological phenomena that are under the coverage of the Insurance Compensation Consortium and are not covered by Own Damage. But it is not the only circumstance that is among the exclusions of this guarantee because it is already covered by other policy coverage.

For example, if the car is stolen and the thief breaks the window to take the radio, destroying the dashboard. In this case, damage occurs to the vehicle itself and it is not known who is the third party guilty, the thief, to answer for these damages.

However, the repair of damages will not be covered with the Own Damage coverage, because the Theft guarantee covers the damages caused by a robbery or attempted robbery. The same happens if there is a fire in the car or the windows are broken by accident.

 

One of the things that we must review before signing an All Risk Insurance is the chapter that the contract dedicates to the coverage of car accessories in the Own Damage guarantee, since there are important differences between some insurers and others.

Standard accessories are not always covered in the same way. Normally, if a car accessory is destroyed after an accident and cannot be repaired, the insurer changes them for new ones.

 

The exception is the tires , since many insurers only cover the tires when the damages are a consequence of an accident with another identified vehicle, and they do not take charge of them if they are the only damaged damages of the vehicle. 

Others only cover a part and compensate the claim with a percentage of the new value, and only some companies compensate the damage to the wheels with the new value, that is, installing a brand new wheel and tire on the damaged car. In this post about the coverage of the rims and tires you can find more information on the subject.

 

Lovers of tuned cars should be very attentive to the subject of accessories. If you change the tires for more attractive ones or incorporate spoilers or any other decorative element and you have an All Risk Insurance, you should know that, if you do not negotiate it with the help of your Insurance broker, the insurer will only include in the All Risk coverage the original elements of the car. 

If you need more information, in this blog we tell you how to insure a tuning car .

 

As in tuned cars, any car can have built-in accessories that are not standard . That is, they are not part of the vehicle's standard equipment or have been installed after the date of purchase.

In order for the policy to cover compensation for these accessories in the event of a claim, in addition to having contracted Own Damage coverage, each of them must be detailed in the Special Conditions of the contract, including the value of the insured accessory.

 

All Risk Insurances are usually the most complete policies and, also, the most expensive. This is so for three fundamental reasons:

  • Own Damage covers a wide range of risks, which affects the price of the Insurance.
  • In many cases, the compensation for the elements of the car or for total loss is calculated on the new value. 
  • Own Damage is the guarantee that has a higher loss frequency ratio among Car Insurance. In other words, the number of claims on insured vehicles is very high. In the case of Own Damage Insurance, it is usually above 35%, much more than the rest of guarantees that are below 10%.

 

An alternative to lower all risk insurance is to take out the policy with franchise. In other words, the insured agrees to bear part of the cost of the repair, as we explain in this post on Car Insurance with Excess .

By sharing the risks, the price of the Own Damages policy is cheaper. Although also in these cases it is necessary to analyze the amount of the franchise that we are going to hire to avoid overpaying. If you are thinking of hiring it, this post will help you understand how an All Risk Insurance with Franchise works .

In conclusion, the Own Damage coverage offers ample protection although it is important to know the fine print of these policies. 

If you are thinking of buying a car and you are looking for an Auto Insurance that covers the damages that occur in your new car, in our comparator you can calculate your Car Insurance with the guarantees you are looking for to obtain the best price. In addition, you can ask our professionals for advice, who will advise you in the search for the Auto Insurance that best suits you.