When you’re out for a drive, have you ever considered how many commercial vehicles are being driven around you? While this question may be weird, we’re sure you haven’t given it much thought. In case you have, needless to say, we are extremely proud!
But why did we ask you this absurd question in the first place? Well, because there are millions of commercial vehicles in India; however, a majority of them are uninsured. While there are many factors at play, the primary reason behind this is a lack of awareness about commercial vehicle insurance.
What Does Commercial Vehicle Insurance Mean?
Commercial vehicle insurance can be simply understood as a customized motor insurance policy that covers the damages and losses caused to or by a commercial vehicle. This insurance policy primarily covers vehicles such as dump trucks, cabs, delivery trucks, company cars, food trucks, etc.
Commercial vehicle insurance includes the damage caused in situations like collisions, accidents, natural calamities, etc. It is primarily beneficial for the businesses that majorly rely on vehicles to operate in industrial or commercial sectors.
Also Read: Engine Protection Cover
What are the Different Types of Commercial Vehicle Insurance?
While we’ve discussed how it works, it is also important to understand its different types as it will help you buy the right plan – especially if you plan on purchasing commercial vehicle insurance online.
So, here are the two main types of commercial car insurance plans available in India:
Comprehensive Commercial Vehicle Insurance
As the name implies, comprehensive commercial vehicle insurance offers 360-degree protection to vehicles owned by businesses. This includes loss or damage to the vehicle that may result from uncertainties like an accident, theft, robbery, fire explosion, or natural disasters like earthquakes and floods.
Similarly, if any of these situations result in damage to a third-party person’s property (including vehicles), then the insurance provider will be required to offer financial compensation to the individual.
Additionally, comprehensive commercial vehicle insurance will also cover the expenses for any bodily injuries of the car’s driver as well as any third-party individual involved in the incident. But if an incident leads to disability or death of a person (the policyholder or the third-party person), a compensation sum will be provided by the insurer; however, in case of death, the amount will be decided by the Motor Accidents Claim Tribunal.
Also, since comprehensive commercial car insurance provides wide coverage, the premiums for this policy are comparatively higher. But it largely depends on which plan you choose and the benefits it entails.
Third-Party Liability Commercial Vehicle Insurance
Even though a third-party liability insurance plan for commercial vehicles is not as comprehensive, it is a popular choice for several business owners in India. This is because even third-party liabilities can quickly turn into a financial burden, which can leave you in debt or lead to bankruptcy.
However, buying third-party liability commercial car insurance can prevent such challenging situations, as the policy provides financial coverage for damage or loss of any third-party vehicle and property. Additionally, the insurance plan covers bodily injuries sustained by a third-party individual.
Moreover, an insurance provider will also offer monetary compensation if an incident involving your commercial vehicle results in the demise or disability of a third-party person. But in these cases, the sum is decided by the Motor Accidents Claim Tribunal, which is the same as comprehensive insurance policies.
You should also know that the premiums for this policy are comparatively cheaper, and you can even buy third-party liability commercial vehicle insurance online from the comfort of your home or workplace.
Benefits of Commercial Vehicle Insurance
Now that we’re through with discussing commercial vehicle insurance and its types at length, let’s look at some crucial benefits of buying the policy:
Say Goodbye to Unexpected Financial Woes
We’re sure you’ll agree that unexpected financial expenses are a significant stress factor, especially when you’re expanding (or just starting out) your business. Instead, they can become a nightmare rather quickly. However, investing in vehicle insurance will ensure that you are covered against such expenses, whether the damage is a result of theft, accidents, or natural calamities. Plus, you can focus on what’s important.
Third-Party Liability Coverage
Whether you buy comprehensive commercial car insurance or third-party liability insurance, you will be financially protected against all third-party liabilities. This means that if your commercial vehicle is involved in an incident that causes damage/loss to a third-party individual, property, or vehicle, the insurer will bear all the costs incurred by the third party.
You Meet the Legal Requirement
As we’ve discussed several times, as per the Indian Motor Vehicles Act of 1988, buying commercial vehicle insurance is a legal mandate in India. So, by purchasing the insurance policy, not only do you meet the said legal requirement, but you also keep yourself financially protected. And, of course, you even get the much-needed peace of mind.
One of the greatest (yet uncommon) advantages of commercial vehicle insurance is that the plan can be easily customized. This means that you can enhance the coverage by opting for riders or add-ons, such as towing assistance, accessory cover, engine protection cover, breakdown assistance, zero depreciation cover, and personal accident rider. However, the more add-ons you choose, the higher the premium will be.
Hassle-Free Online Purchase and Renewal
Today, like most other things, you can also purchase commercial car insurance online, and all you need is a good internet connection and a smartphone or laptop. The best part? You can also renew your insurance online while you kick back and relax. Better yet, the process for online purchase and renewal is completely hassle-free, quick, and seamless.
While we have covered the primary advantages of commercial car insurance, you can also avail additional benefits, such as No Claim Bonus (NCB), cashless claim, paperless claim, 24 x 7 customer support, and more. Make sure you’re on the lookout for these when buying insurance!
Also Read: Car Insurance Renewal
Best Commercial Vehicle Insurance Companies
Following is the list of some of the best commercial vehicle insurance companies in India:
- Bajaj Allianz Commercial Vehicle Insurance
- Digit Commercial Vehicle Insurance
- Edelweiss Commercial Vehicle Insurance
- National India Commercial Vehicle Insurance
- Oriental Commercial Vehicle Insurance
- Reliance General Commercial Vehicle Insurance
- Shriram General Commercial Vehicle Insurance
What is Covered Under Commercial Car Insurance?
- Loss or damage of the insured commercial vehicle if arising from road accidents, fires, explosions, theft, robbery, lightning, natural disasters, and malicious acts.
- Coverage for third-party liabilities, including penalty claims, property damage, vehicle damage, or physical injuries.
- Bodily injuries suffered by the owner or driver of the commercial vehicle.
- Financial compensation if any mishap involving the insured car results in disability or death of an individual.
- Coverage for financial expenses, including lawsuits.
- An option to extend coverage by opting for add-on covers or riders.
What are Common Exclusions Under Commercial Car Insurance?
- The wear and tear of the commercial vehicle due to prolonged usage.
- Vehicle breakdown due to failure of mechanical or electrical parts, or both.
- If you are found driving with an invalid license, your insurance claim can be rejected.
- Any incidents that occur when the policy tenure is over.
- A claim will not be approved if the driver of the commercial car is found driving under the influence of alcohol or drugs.
- Contractual liabilities, consequential loss, war, and nuclear perils are also not covered under commercial vehicle insurance.
Why Commercial Vehicle Insurance Is Important?
Commercial vehicle insurance is important if one or more of the following factors are true:
- Your car is being used for the delivery of goods like food items, supplies and materials, messenger services, etc.
- You use your car for transportation services.
- You have leased your car to another person, a corporation or a partnership.
- You have titled your car to a partnership, business, or corporation.
How to Buy Commercial Vehicle Insurance Online?
- Consider all your requirements while buying a commercial vehicle insurance policy. Once done, visit your insurer’s website or download the mobile application to purchase a policy.
- Fill in a few details such as your car’s make and model, purchase year, variant, locations, previous policy details (if any), etc.
- Compare plans to measure the scope of coverage, inclusions and exclusions, and the price of the commercial vehicle insurance policy before buying it.
- Also, thoroughly go through the terms and conditions of the policy that you opt for.
- Finally, make a payment to get the policy without any paperwork or form-filling.
- Commercial vehicle insurance is designed to offer financial protection against losses and damages caused to and by a commercial vehicle and its respective driver/owner.
- As per the Indian Motor Vehicles Act, it is compulsory for all businesses to purchase commercial vehicle insurance for their automobiles.
- Some examples of commercial vehicles include auto-rickshaws, taxis, trucks, vans, buses, tractors, and trailers, among others.
- There are two types of commercial vehicle insurance policies available in India, namely third-party liability insurance and comprehensive insurance.
- It is possible to buy commercial vehicle insurance online in India.
Are You Legally Required to Buy Commercial Vehicle Insurance in India?
Commercial vehicle insurance is legally mandatory in India, and it’s becoming all the more important considering the wide number of commercial vehicle accidents that take place every day.
As per the Motor Vehicles Act, it is compulsory that all vehicles operating for commercial purposes must be insured. Policyholders should at least have “third party liability” motor insurance, which is essential in the event of an accident caused either by the vehicle owner or the other person driving the other vehicle.
The Indian Parliament amended the Motor Vehicles Act of 1988, which now lists out the various provisions related to drivers’ licenses, insurance covers, registration of vehicles, penalties, etc. Because of this, all commercial vehicle owners are supposed to carry their vehicle insurance documents with them at all times.
How to File a Claim Under Commercial Vehicle Insurance?
To make a claim on your commercial vehicle insurance, you should report the loss or damage of the vehicle first thing after the occurrence. Most insurance companies have toll-free numbers where you can call and make a claim.
Otherwise, you can simply log on to the company’s website to make a claim online. When you reach out to your insurance provider to make a claim, you must provide them with your policy number as a reference. You can even ask for an ambulance or towing facilities if required.
Further, fill in the claim form, and attach a copy of your driver’s license and registration certificate.
Keep the following documents handy while making a claim. (Note: The list of documents might vary with different insurance companies.)
In Accident Cases:
- Claim form (properly filled)
- Proof of insurance
- Tax receipt
- Estimate for repairs
- Copy of driver’s license
- Bills of repair
In case of theft:
- Tax payment receipt
- Previous insurance details
- Original policy document and number
- Copy of an acknowledged letter addressed to RTO which intimates about theft
- Previous insurance details
- FIR and final investigation report
Phew, that was a really long drive, but we think it’s now time to part ways. If you were paying attention, you probably know everything about it. But remember, always be thorough with your research, especially if buying commercial vehicle insurance online. And it’s best to look for reliable and trustworthy insurance providers with a high Claim Settlement Ratio. That’s it for now, we’ll see you later!
Also Read: Car Insurance with Zero Depreciation
Yes, all business owners in India are legally required to insure their commercial vehicles, as stated in the Indian Motor Vehicles Act.
The key factors that affect the premium for commercial vehicle insurance include the vehicle’s IDV, vehicle model, engine type, city of registration, policy type, and add-on riders.
Although it primarily depends on the insurance provider, commercial car insurance policies typically have a tenure of one year.
Yes, you can easily buy commercial car insurance online, and the process is quite quick and hassle-free.
No, commercial vehicle insurance does not cover damages caused due to mechanical failure or electrical breakdown.
According to the motor laws of India, every car, be it personal or commercial, must be covered under a valid car insurance policy. It is important to renew your commercial vehicle insurance policy because you will be charged a hefty amount if you are caught with an expired insurance policy.
IDV or Insured Declared Value is the maximum amount you shall receive from the insurer if your insured vehicle is damaged beyond repair. For example, in commercial vehicle insurance, your insurer shall offer you the IDV of your car if it is damaged beyond repair.
When you renew your vehicle insurance policy, the insurance company often asks you to pay an additional amount in case the risk of covering your vehicle has increased. This additional cost is known as loading.