As you might know already, according to the Motor Vehicles Act, 1988, all vehicles plying on public roads in India are mandatorily required to be insured. This includes vehicles that are used for both personal, business & commercial purposes. If you own a commercial vehicle or plan to own one in the near future, then it is crucial for you to know all about commercial vehicle insurance.
You can learn more about this in the following sections.
Now that you know what commercial vehicle insurance is, let’s take a look at why you need it.
Mandated by the law
As seen above, possession of a valid insurance plan is mandatory for motor vehicles, according to the Motor Vehicles Act, 1988. The Act states that every commercial vehicle that’s used on public roads must have at least a valid third-party commercial vehicle insurance.
Protects you financially
One of the major advantages of getting a commercial vehicle insurance is that it can provide some much-needed financial cushion in the event of an accident, damage, or loss caused to or by your vehicle.
For instance, if your vehicle is involved in an accident, you may have to pay damages or compensate for any losses to third-parties in addition to restoring your own vehicle to its original condition. Spending money out of your own pocket for all of this can end up being a significant financial burden. But with commercial vehicle insurance, these expenses will be taken care of by your insurance provider, thereby securing your finances.
Instills confidence in your customers
Commercial vehicle insurance also covers damages and losses to the goods that you transport using your vehicle. This tends to instill a sense of faith in your customers and can help put their mind at ease. Knowing that their belongings are well protected, your customers will likely be more willing to continue doing business with you.
The term ‘commercial vehicle’ encompasses a wide range of vehicles of different makes and models, purposes, and sizes. Taking this into consideration, it may be hard for you to keep track of the kind of vehicles that are covered by commercial vehicle insurance. However, here’s a quick guide that can help you out. Given below is a list of vehicles that are currently covered by a typical commercial motor insurance plan.
This includes auto rickshaws, cabs, taxis, private buses that ferry passengers, and school buses, among others.
This includes mini trucks, trucks, tempos, and lorries, among others.
In addition to the above categories, there are several other heavy commercial vehicles that are used for miscellaneous or special purposes such as tractors, earth moving vehicles, excavators, cement mixers, and more. All of these vehicles are covered by heavy vehicle insurance.
Commercial vehicle insurance offers a lot more than just protection for your vehicle and your finances in the event of an accident or a mishap. Here’s a quick look at some of the key features:
Buying commercial vehicle insurance online is now a hassle-free process and can only take a few minutes.
Nearly all commercial vehicle insurance plans provide a paperless claim facility that expedites the claim process considerably. This means that you don’t have to get too stressed about having your claims settled on time.
With commercial vehicle insurance, you can also get all your claims settled directly through the cashless claims facility, thereby saving you plenty of time and effort.
If you feel the need to increase your coverage beyond a commercial vehicle insurance, then you can do so via the add-ons during the time of purchase.
Just like how important it is to know what commercial motor insurance is, it is equally crucial for you to be aware of the kind of incidents that are covered by your plan. Here’s an overview of what’s generally covered by commercial vehicle insurance:
Damages to third party vehicles or properties by your commercial vehicle
Damages or losses arising out of bodily injuries or death of a third party by your vehicle.
Damages to your commercial vehicle as a result of any of the following:
The coverage offered by commercial motor insurance can be enhanced by simply opting for add-ons at the time of purchase or renewal. However, opting for add-ons results in a nominal increase in the premium. Therefore, it is advisable to use a premium calculator before making a purchase, to determine the total amount of premium that you would have to pay. Let’s take a look at a few of the add-ons that you can opt for:
This ensures that you get the full amount of the claim without any depreciation cuts whatsoever.
This add-on covers the costs of consumables such as nuts, bolts, engine oil, and more during repair.
If your vehicle’s engine or gearbox is damaged due to an accident or mishap, this add-on ensures that all costs related to repairing the damage are covered.
If your vehicle gets stranded in the middle of the road, the 24/7 roadside assistance cover in car insurance can ensure that you get assistance as soon as possible.
In the event of any loss in revenue due to your vehicle being under repair, this add-on helps cover the said losses.
This add-on covers the cost of treatment of bodily injuries or death of the owner or driver of the commercial vehicle.
A commercial vehicle insurance plan does not cover all instances of damages or losses caused to or by your vehicle. Therefore, it is very important to know what’s not covered. Here’s a quick look.
In the case of a third-party plan, any damages to your own vehicle will not be covered.
Consequential damages, which are basically damages to your vehicle that occur not as a direct result of an accident or a mishap.
Damages to your vehicle as a result of driving under the influence of alcohol or drugs.
Damages to your vehicle as a result of driving without a valid driving license.
Damages to your vehicle as a result of negligent behaviour.
Regular wear and tear of your vehicle.
Damages to your vehicle as a result of wars, civil or external, and nuclear war.
Mechanical or electrical breakdowns.
If you’re looking to renew your insurance for commercial vehicles, here’s something that you may not know. You can actually renew it online within just a few minutes from the comfort of your own home. Here’s the step-by-step process that you would have to follow:
Step 1: Visit the website of your commercial vehicle insurance provider.
Step 2: Look for the policy renewal section.
Step 3: Fill in the required details, such as your policy number, the cover, the tenure for which you want to renew the policy, and the vehicle’s details, among other things.
Step 4: Submit the application with the details filled in.
Step 5: Pay your renewal premium online.
Just like renewing a commercial vehicle insurance online, filing a claim is also equally easy. Follow the guide below to lodge an insurance claim:
Step 1: Visit the website of your commercial vehicle insurance provider and register your claim online.
Step 2: Submit the documents required to register your claim. This typically includes paperwork to offer information like the engine and chassis number, the description of the accident, the date and time of the accident. Moreover, you will have to provide a copy of the police complaint in case your claim is for theft of your vehicle.
Step 3: The insurer will then assess your claim and the documents you’ve submitted.
Step 4: Once your claim is approved, it will be settled immediately.
Now that you’re aware of everything that you need to know about commercial vehicle insurance, let’s take a look at the things that you will have to consider when applying for your cover:
Having adequate insurance coverage for your vehicle is very important. And comprehensive commercial vehicle insurance plans offers you just that. So, it is a good idea to opt for such a plan instead of going for just a simple third-party one.
At the time of purchase of a commercial vehicle insurance, you will be asked to choose the Insured Declared Value (IDV) for your vehicle. The higher the IDV that you choose, the higher the amount of compensation in the case of theft or total loss. That said, higher IDVs can increase your premium, so make sure to use a commercial vehicle insurance calculator to know just how much premium you will have to pay.
During the renewal process, you will also be asked to enter the details of any No Claim Bonus that you’ve accumulated. NCB is granted when you don’t make any claims during a year. So, don’t forget to enter the details of accumulated NCB when applying since it can help lower the commercial vehicle insurance cost.
Finally, don’t forget to opt for add-ons at the time of purchase or renewal of commercial vehicle insurance. You can enhance the coverage that you receive beyond what’s offered by the base insurance plan. But remember that it can increase your overall premiums.
The maximum tenure that insurance providers typically offer on a commercial motor insurance plan is 3 years.
The premium for your commercial vehicle insurance plan is determined based on factors such as -
Make and model of the vehicle
Type of vehicle
Age of the vehicle
City of registration
Type of coverage
Currently, there are two types of commercial motor insurance plans that you can choose from, namely comprehensive and third-party insurance.
No. You can only opt for add-ons at the time of purchase or renewal of your commercial vehicle insurance plan.
Comprehensive insurance is the better option since it covers both third-party liabilities as well as own damages to your vehicle.