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, and 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. And that’s exactly what we’re going to be looking at here. 

What is Commercial Vehicle Insurance?

Let’s first begin by trying to understand what commercial vehicle insurance is. As the name itself signifies, it is basically a motor insurance policy that’s designed to financially protect the owner of a commercial vehicle from any damages or losses. These damages or losses can either be caused by the commercial vehicle to other third-party property or individuals, or by other third parties to the commercial vehicle. 

If your vehicle has comprehensive commercial vehicle insurance, both these kinds of damages - namely third-party damages and own damages - are covered. In case your vehicle has only third-party commercial vehicle insurance, the coverage is limited to damages or losses that your vehicle causes to other parties. 

Why do you need Commercial Vehicle Insurance?

Now that you know what commercial vehicle insurance is, let’s take a look at why you need it. 

  • It is mandated by the law

As we’ve already seen above, possession of a valid insurance plan is mandatory for motor vehicles as per 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. 

  • It 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 protecting you and your financial situation.  

  • It 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. And knowing that their belongings are well protected, your customers will also more likely be willing to continue doing business with you.

Types of Commercial Vehicles Covered

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. 

  • Commercial Vehicles Carrying Passengers 

This includes auto rickshaws, cabs, taxis, private buses that ferry passengers, and school buses, among others.  

  • Commercial Vehicles Carrying Goods

This includes mini trucks, trucks, tempos, and lorries, among others.   

  • Miscellaneous and Special Vehicles

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.  

Key Features of Commercial Vehicle Insurance

Commercial vehicle insurance offers so much more than just protection for your vehicle and your financial situation in the event of an accident or a mishap. Wondering what they are? Here’s a quick glimpse at some of the key features- 

  • Hassle-Free Purchase Process

Did you know that buying commercial vehicle insurance online is now a hassle-free process? And it only takes a few minutes! 

  • Quick Claim Settlement

Today, nearly all commercial vehicle insurance plans provide a paperless claim facility that expedites the claim process considerably. So, you don’t have to get too stressed about having your claims settled on time. 

  • Cashless Claims

With commercial vehicle insurance, you can also get all your claims settled directly through the cashless claims facility, saving you plenty of time and effort. 

  • Option to Enhance Coverage through Add-ons 

Feel the need to increase your coverage beyond what’s offered by a commercial vehicle insurance plan? In that case, you can do so by opting for the add-ons at the time of purchase itself. 

What's covered in Commercial Vehicle Insurance?

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. 

 

  1. Damages to third party vehicles or properties by your commercial vehicle 

  2. Damages or losses arising out of bodily injuries or death of a third party by your vehicle. 

  3. Damages to your commercial vehicle as a result of any of the following:

 

Fire, explosion, lightning, or self-ignition

 

Theft or burglary 

 

Strikes or riots 

 

Natural calamities such as earthquakes, floods, hurricanes, storms, etc. 

 

Landslides 

 

Malicious activities

 

Terrorist activities 

 

Accidents caused by third parties  

 

 

Add-ons available with Commercial Vehicle Insurance

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. That said, let’s now take a look at a few of the add-ons that you can opt for. 

 

  • Zero Depreciation Cover 

This add-on ensures that you get the full amount of claim without any depreciation cuts whatsoever. 

 

  • Consumable Cover

This add-on covers the costs of consumables such as nuts, bolts, engine oil, and more during repair.

 

  • Engine and Gearbox Cover 

If your vehicle suffers any damage to the engine or gearbox due to an accident or mishap, this add-on ensures that all costs related to repairing the damage are covered. 

 

  • Roadside Assistance Cover 

If your vehicle gets stranded in the middle of the road, the roadside assistance cover can ensure that you get assistance as soon as possible.  

 

  • Loss of Revenue Cover 

In the event of any loss in revenue due to your vehicle being under repair, this add-on helps cover the said losses. 

 

  • Personal Accident Cover

This add-on covers the cost of treatment of bodily injuries or death of the owner or driver of the commercial vehicle.  

 

What’s not covered in Commercial Vehicle Insurance?

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. 

 

  1. In the case of a third-party plan, any damages to your own vehicle will not be covered. 

  2. Consequential damages, which are basically damages to your vehicle that occur not as a direct result of an accident or a mishap. 

  3. Damages to your vehicle as a result of driving under the influence of alcohol or drugs. 

  4. Damages to your vehicle as a result of driving without a valid driving license. 

  5. Damages to your vehicle as a result of negligent behaviour. 

  6. Regular wear and tear of your vehicle.

  7. Damages to your vehicle as a result of wars, civil or external, and nuclear war. 

  8. Mechanical or electrical breakdowns.

 

How to renew?

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. Wondering how? 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 details required, 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.

How to file a claim? A step-by-step guide

Just like renewing a commercial vehicle insurance online, filing a claim is also equally easy. Follow the guide below to lod ge 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, and 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 is settled immediately.

 

Important points to be considered while applying for commercial vehicle insurance

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. 

 

  • Insurance coverage 

Having adequate insurance coverage for your vehicle is very important. And comprehensive commercial vehicle insurance plans offer you just that. So, it is a good idea to opt for such a plan instead of sticking to just a simple third-party one.

 

  • Insured Declared Value (IDV)

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. 

 

  • No Claim Bonus (NCB)

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.   

 

  • Add-ons

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.

FAQs

  • ✔️What is the maximum tenure of a commercial vehicle insurance policy?

    The maximum tenure that insurance providers typically offer on a commercial motor insurance plan is 3 years. 

  • ✔️How is the commercial vehicle insurance premium determined?

    The premium for your commercial vehicle insurance plan is determined based on factors such as -

    • Make and model of the vehicle

    • Type of vehicle

    • Engine capacity

    • IDV

    • Age of the vehicle

    • City of registration

    • Type of coverage

    • Add-ons chosen

  • ✔️ What are the different types of commercial vehicle insurance plans currently available in India?

    Currently, there are two types of commercial motor insurance plans that you can choose from, namely comprehensive insurance and third-party insurance. 

  • ✔️Can I opt for add-ons at any point in time?

    No. You can only opt for add-ons at the time of purchase or renewal of your commercial vehicle insurance plan. 

  • ✔️Which is better - third-party commercial vehicle insurance or comprehensive commercial vehicle insurance?

    Comprehensive insurance is the better option since it covers both third-party liabilities as well as own damages to your vehicle. 

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