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Every motor vehicle that comes to the road, has to be insured. Whether you own a bike, a car or a commercial vehicle, an insurance policy is mandated by the government under the Indian Motor Act. In this article, we will learn all about Commercial Vehicle Insurance.
What is Commercial Vehicle Insurance?
A commercial vehicle is a vehicle that is used to carry goods or to fare passengers. Just like a private car or bike, a commercial vehicle also needs insurance cover. Through commercial vehicle insurance, you can cover the expenses you may have to incur in case of any loss caused by or to a commercial vehicle. The causes of damage may include accidents, natural disasters, collisions, theft or fire. It is binding for all businesses to have a commercial vehicle insurance plan for all their vehicles.
Importance of Commercial Vehicle Insurance
For any business or an entrepreneur, commercial vehicles are quite essential and thus insurance of these commercial vehicles also becomes very important. Let us take a look at the reasons why you should have Commercial Vehicle Insurance:
- Having a Commercial Vehicle Insurance is mandated by law. Not having one can land you in trouble.
- Accidents can happen anywhere and anytime. In case your commercial vehicle damages some other person or someone else’s property, the liability of the repair cost would lie on you. In such a situation your commercial insurance would protect you from such a financial crisis.
- In case your own commercial vehicle is damaged in an accident, your insurance plan would pay for the damages
- If you are using a commercial vehicle to fare passengers, your insurance plan would also protect and cover them.
- Commercial Vehicle Insurance also protects the paid driver along with his family in case of a disability or even death.
Types of Commercial Vehicles Covered
- Passenger Carrying Vehicle Insurance:
The vehicles that are used to carry passengers from one place to another are passenger-carrying vehicles, for example- rickshaws, e-rickshaws, buses, coaches etc. Damages that are caused due to road accidents, collision, theft or calamities will be covered under this insurance. - Goods Carrying Vehicle Insurance:
As the name suggests, goods carrying vehicles carry commodities from one place to another, such as trucks, trailers, cranes, vans, tractors etc. Damages that are caused due to road accidents, collision, theft or calamities will be covered under this type of insurance. - Miscellaneous and Special Vehicle Insurance:
Recreational vehicles, motor homes, motorised golf carts and other such vehicles are insured under this kind of insurance.
Types of Commercial Vehicle Insurance Policies
Different kinds of commercial vehicles have different insurance requirements. A passenger-carrying commercial vehicle will have different features than goods-carrying insurance. Therefore, when you buy a new vehicle or hire a new driver, you need to have an insurance plan that is suitable for its use.
There are 2 main types of commercial vehicle insurance:
- Third-Party Commercial Vehicle Insurance
Third-party car insurance provides coverage to a third-party person or property. It also includes cover for bodily injury, death or other damages. This kind of insurance does not cover your own car damages. - Comprehensive Insurance
As the name suggests, comprehensive insurance has a wider scope of coverage. It covers the commercial vehicle from unforeseen incidents like damage, fire, theft and natural disasters too. Besides this, it also covers third-party damages.
A change in the location where your commercial vehicle delivers also has an impact on the insurance policies. To ensure that your vehicle receives break-free coverage and to ensure that your claims are easily processed, do inform the insurance company about the changes that you make.
Features & Benefits of Commercial Vehicle Insurance
When you buy insurance for your commercial vehicle you shield it from all the financial damages that it may bring. Your insurance plan can protect you from third-party liability and damages to your own vehicle/driver. Let us take a look at the benefits of commercial vehicle insurance:
- Mandatory by law
- Comprehensive coverage provides cover for an array of situations
- Making claims is be simple and quick
- Repair of a commercial vehicle can be costly, your insurance would prevent a dig in the savings
- It offers financial protection for your employees as well as your customers
- Almost all kinds of commercial vehicles - passenger-carrying, goods-carrying, trailers and special vehicles - can be covered
- The insurance plan will help you get a sense of safety and peace of mind, knowing that even in case of an untoward incident, you will be covered
What is Covered in Commercial Vehicle Insurance?
When you buy comprehensive commercial vehicle insurance, you have the following facilities:
- Third-Party Liability
Under this type of insurance, the liabilities that arise due to the involvement of a third-party are covered. It could be a physical injury or death of a person, damage caused to someone else’s property. - Personal Accident Cover
Personal Accident Cover comes as an inbuilt cover. If the owner or the employed driver gets injured or dies in a road accident, the commercial vehicle insurance would provide cover for the loss. - Own Damage Cover
Under this insurance, the following are covered:- Man-made disasters such as theft, terrorism, riots
- Natural disasters such as earthquakes, fire, flood etc
- Damages during transportation through air, water and road
- Towing Coverage
Many companies that offer commercial vehicle insurance also offer towing facilities as a part of the policy. This service proves to be very helpful in case the vehicle gets disabled and can only be towed.
What is Not Covered in Commercial Vehicle Insurance?
When making a claim, keep in mind that the following conditions/facilities are NOT included in coverage:
- Accidents that arise in non-geographical regions for that vehicle
- A vehicle was driven by someone other than the driver in charge
- The vehicle used for other unspecified functions
- Damage under wars/ nuclear attacks
- Contractual liabilities
- Mechanical/ Electric failures
- Expired/lapsed Policy
- Ionizing radiation
- Losses that are consequential
Add-on Covers Under Commercial Vehicle Insurance
The insurance cover of your commercial vehicle can be further increased by opting for add-ons. You would have to pay a little extra for each but the cover can increase many folds:
- Personal Accident Cover
- Zero Depreciation Cover
- Towing Cover
- Engine Protector
- Accessory Cover
- Legal liability Cover
How the Premium of Commercial Vehicle Insurance is Calculated?
Calculating the premium for your commercial vehicle insurance can be a great way of comparing it with other similar plans and getting the best insurance deal for your vehicle. Before finalising, you must take a look at the offers, features, premium rates etc that are being offered by different plans.
The best way to calculate the premium for commercial vehicle insurance is to do it through a motor insurance premium calculator. It is an online calculator that helps you get an estimate of the premium that you would have to pay for the insurance plan that you select. It also caters to the factors like- age of the vehicle, its registration, location, make, model and variant etc. You also have the option of adding add-ons to your plan and then seeing the final estimate.
How to Renew Commercial Vehicle Insurance?
If you want to continue with the safety net of your commercial vehicle insurance, you must renew it timely. A delay will not only put you at risk of landing into financial damage in case of an accident, but you can also get into legal trouble for travelling without insurance.
Renewal can be done online as well as offline. Get in touch with your insurance agent or visit the company office to renew the policy. However, the process becomes easy and convenient when renewing insurance online. You just need to enter the details of your vehicle and the policy details and pay the premium through an electronic mode. Your policy will be renewed instantly.
How to File a Claim Under Commercial Vehicle Insurance?
If you follow all the guidelines given by the insurance company, making a claim for your commercial vehicle will not be difficult. To ensure that the claim procedure is a smooth one, follow the steps given below
1. Accidental Damage Claim
- Notify the insurance company or your insurance agent immediately about the accident/damage
- You can ask for a towing facility, it may or may not be covered, depending on the kind of plan you have
The claim can be made in 2 ways:
- Cashless Claim
- For a cashless claim, you would have to go to a network garage, a surveyor from the insurance company would come to access the vehicle and help you with the proceedings
- You will have to fill in the claim form and attach copies of the Driver’s license of the driver and the registration certificate of the vehicle
- Reimbursem*nt
- For a reimbursem*nt, after the surveyor assesses your vehicle, you can take it for repair
- You would have to first pay the repair cost upfront and then you can get the reimbursem*nt later
- Make sure you keep all the repair-related bills and receipts carefully and safely so that the reimbursem*nt can be smooth
- Get in touch with the customer care to file the request for reimbursem*nt or visit a branch/company office
- You can also fill in the claim form online by visiting the insurance company’s website.
2. Theft Claim
- In case of theft of your commercial vehicle, an FIR must be filled as soon as possible at the earliest
- The insurance company must be informed about the same
- The police would look for yourcommercial vehicle, in case they cannot, they will issue a “Non-Traceable Certificate”
- You will then haveto obtain a Claim Form from the company,
- Submit it back along with the required documents and the “Non-Traceable Certificate”
- The insurance company will settle the claim as per your commercial vehicle’s Insured Declared Value (IDV).
Documents Required when making a Claim:
When making a claim against the commercial vehicle insurance you may need to produce the following documents:
- Registration documents of the vehicle
- Original driver’s Licence
- Claim Form-Filled and signed
- Copy of FIR or MCR
- Driver’s Aadhar Card
- Receipt of Tax paid
- Policy papers
- Route permit
- Load challan, in case of a goods-carrying vehicle
- Cancelled Check, in case of reimbursem*nt, is requested
- Payment bills and receipts, in case reimbursem*nt, is requested
Commercial Vehicle Insurance Cost
Depreciation is a major element when it comes to commercial vehicle insurance. The commercial vehicle insurance price is subject to the depreciation value and thus the IDV, Insured Declared Value, is the current market value of the commercial vehicle. With every passing year, the vehicle depreciation, and so does its IDV, let’s see how:
| Age of the Vehicle | Rate of Depreciation |
|---|---|
| Within 6 months | NIL |
| 6 months - 1 year | 5% |
| 1 year - 2 years | 10% |
| 2 years - 3 years | 15% |
| 3 years - 4 years | 25% |
| 4 years - 5 years | 35% |
| 5 years - 10 years | 40% |
| After 10 years | 50% |
How to Opt for Commercial Vehicle Insurance Online?
There are many companies that offer commercial vehicle insurance, and often selecting the best plan may be confusing, but as discussed above, if you keep all the important factors in mind, selecting a suitable insurance plan would not be difficult. Once you finalise the plan, follow the steps given below when buying Commercial Vehicle Insurance Online:
- Step 1
Visit the official website of the company that you wish to buy the insurance from. You can also visit the website to compare many plans at once and buy the right one - Step 2
Enter your name/name of the company and contact details - Step 3
Fill in all the required field such as make, model, variant details of the vehicle you wish to choose - Step 4
Select the Type of Commercial Vehicle you wish to insure and its desired usage - Step 5
Select the kind of Insurance you wish to select for example Third-Party or Comprehensive Insurance - Step 6
Go through the list of add-on options that are available with the plan and select the ones you want - Step 7
Check all the details and take a look at the premium amount. If the amount is in your budget go to ‘payments’ otherwise you can alter the plan - Step 8
Attach the list of documents required by the company in the given format. A list of the documents is also given below so that you can keep them ready beforehand - Step 9
Once you are satisfied with the details, check them once and then click on ‘payment’. You can make the payment through Netbanking, Credit or Debit Card - Step 10
Once the purchase is successful you will soon receive a PDF of the policy papers and other necessary documents via email
Documents Required
When buying commercial vehicle insurance online, the following documents would be required:
- Registration number, Chassis number and the engine number
- Registration Book Copy
- Your Name and Contact details- email, mobile number
FAQs
1. How to choose the right commercial vehicle insurance online?
There are many parameters that you need to keep in mind when buying commercial vehicle insurance. As there are many companies that offer vehicle insurance, you will have a lot of choices, and thus selecting the best one can be done on the following basis:
- Select what you need
- Compare all available plans
- Availability of add-ons
- Claim process
- ICR of the company
- Go through all terms and conditions
2. Is commercial vehicle insurance different from car insurance?
If you use your private vehicle for a commercial purpose, you may not be able to make an insurance claim, therefore understanding the difference between the two is very essential. Commercial insurance covers all your business vehicles-big trucks and trolleys to small cars that are registered for the same. Your personal car insurance will cover the accidents that occur when using the vehicle for personal reasons and would not cover business use.
3. Is it mandatory to renew commercial vehicle insurance?
Yes, it is. If you want to continue with the safety net of your commercial vehicle insurance, you must renew it timely. A delay will not only put you at risk of landing into financial damage in case of an accident, but you can also get into legal trouble for travelling without insurance.
4. Can I transfer a commercial vehicle insurance policy to a new owner?
If you are planning to sell the car, you would not be needing its insurance too. So, when you sell your commercial vehicle, transfer the insurance to the new user’s name. By doing this you will avoid any liabilities that may arise in the future.
5. How to file an accidental claim under commercial vehicle insurance?
- Notify the insurance company or your insurance agent immediately about the accident/damage
- You can ask for a towing facility, it may or may not be covered, depending on the kind of plan you have
- The claim can then be made in 2 ways: Cashless Claim or Reimbursem*nt, which depends on whether you get the vehicle repaired at a network garage or a non-network garage.
- For a cashless claim in a network garage, you would have to go to a network garage, a surveyor from the insurance company would come to access the vehicle and help you with the proceedings
- For reimbursem*nt, after the surveyor assesses your vehicle, you can take it for repair. You would have to first pay the repair cost upfront and then you can get the reimbursem*nt later
6. What is the tenure of commercial vehicle insurance policy?
A commercial vehicle insurance policy is generally valid for 1 year unless a long term policy for the commercial vehicle has been taken.
7. What will happen to my policy, if I sell my commercial vehicle?
If you are planning to sell the car, you would not need its insurance too. So, when you sell your commercial vehicle, transfer the insurance to the new user’s name. By doing this you will avoid any liabilities that may arise in the future.
