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Commercial Vehicle Insurance

Commercial Vehicle Insurance Overview

It means insurance of all types of commercial vehicles like goods carrying the vehicle, passenger-carrying vehicle, Taxis, Tractors, Cranes and more. Whether you are running a small business with a van or doing transport business or any other business where commercial vehicles are used. Insurance is mandatory. Third party is mandatory in India under Motor vehicle Act. Third Party Commercial Vehicle insurance is compulsory in India. Basically, commercial vehicle package policy offers the insurance cover not only for the liability arising out of the third party but covers you against the financial loss because of theft, road accidental damage or natural disaster to your vehicle. It covers loss and damage of your vehicle, unlimited third party liability, Indemnity for third party property up to 7.5 lakhs, personal accident cover, zero depreciation cover, Windshield glass cover and more.

Commercial Vehicle Insurance policy covers

Loss or damage to your vehicle due to:

  • Fire Explosion
  • Burglary
  • Housebreaking
  • Theft
  • Riot
  • Strike
  • Natural Disaster
  • Landslide Rock slide
  • Road Accident
  • Malicious act
  • Terrorist activity

Third-party insurance policy, which protects your vehicle from damages and losses that happen due to physical injury or death to a third party or any damage to that third party vehicle by use of your insured vehicle.

Commercial Vehicle Insurance policy does not cover

  • Wear and tear, mechanical, electrical breakdown of the vehicle is not cover in your insurance policy.
  • Insurance company does not cover the loss or damages if the vehicle is used beyond the limitations.
  • If the commercial vehicle is used beyond the specified geographical area coverage loss or damages of commercial vehicle is not covered.
  • Anything except original damage is not covered under the commercial vehicle insurance policy
  • Commercial vehicle policy does not cover damages or losses due to ionizing radiation, nuclear perils and war.
  • Contractual liability is not cover in this policy at the time of claim settlement.

Cashless Claim

The most important benefit of insurance is you will get cashless service in the tie-up garage i.e. the network garage. If you met with an accident you can directly take you vehicle in the network garage and get cashless service. You don’t have to spend any amount on the parts covered in the insurance.

Third Party Commercial Vehicle Insurance

It is the second type of insurance which includes third party insurance. Under this insurance, the policyholder can get a claim for his own vehicle. It covers accidental damage, theft. PA cover and several add-on such as Zero Deprecation cover, roadside assistance and more. In comprehensive insurance, you have to set IDV i.e. the Value of your vehicle. It will decrease by 10% every year (as per rules).

Comprehensive Commercial Vehicle Insurance

There are many companies doing commercial insurance; each company has separate premium based on Maximum IDV they provide, add on covers and brand value of the company. Comparing before buying is a smart decision. Different companies come up with different discounts. Comparing will save your money by using your limited time. Also, you can compare the claim status, network garage and more before buying a policy.

How to compare Commercial Vehicle Insurance

There are many companies doing commercial insurance; each company has separate premium based on Maximum IDV they provide, add on covers and brand value of the company. Comparing before buying is a smart decision. Different companies come up with different discounts. Comparing will save your money by using your limited time. Also, you can compare the claim status, network garage and more before buying a policy.

5 Benefits of Commercial Vehicle Insurance

  1. Claim for accidental damages: If you met with an accident, the company will cover your vehicle depending upon the policy and IDV. In the case of comprehensive, you will get a claim for own vehicle as well as another vehicle. Both parties will get a claim. In the case of the third party, only another person will get the claim.
  2. Personal Accidental Cover: In case of comprehensive insurance, you will get PA cover. If you met with an accident or death, the company will give a claim under those circumstances. The premium of PA cover is very nominal but the coverage is huge.
  3. Zero Depreciation: This feature is under a comprehensive commercial vehicle. In comprehensive insurance, there are capping’s depending upon parts of the vehicle. But, if you have zero depreciation commercial vehicle insurance, you will get 100% of the claim. There will be no capping on the vehicle parts. Zero depreciation is available for limited years. Not all companies provide the cover after a few years. Extra amount will be added in your premium but the additional benefit that it is providing will cover the extra premium amount.
  4. Roadside Assistance: This feature is sometimes included in the policy and sometimes you have to take add-on of this feature. The feature will add extra load on your pocket but it is one of the best add-on features that insurance companies provide. Under this feature, if your vehicle got damaged on the road due to any reason. Your insurance company will help you to reach the nearest garage. It is their responsibility to take care of your vehicle and drop it to the nearest garage. Normally you can use this add-on 2 to 3 times in a year but actual times will be written in your policy.
  5. Third Party Coverage: In any case you are caught by the police, as per rules you should have at least third-party insurance with you. If you don’t have proper documents, you have to pay fine accordingly. Comprehensive insurance policy includes third party insurance. In a situation where you want to sell your vehicle or RC transfer. Your insurance policy plays an important role.

Companies dealing in commercial vehicle insurance

  • Tata AIG General Insurance Company Limited
  • IFFCO Tokio General Insurance Company Limited
  • Royal Sundaram General Insurance
  • HDFC ERGO General Insurance Company
  • Reliance General Insurance
  • Shriram General Insurance Company Limited
  • Bajaj Allianz General Insurance
  • Bharti AXA General Insurance
  • The Oriental Insurance Company
  • The New India Insurance Co. Ltd.
  • Cholamandalam MS General Insurance

Key Features of Commercial Vehicle Insurance

Zone of Registration
Zone of commercial vehicle registration effects the premium. There are three zones and the premium are uppermost for vehicles recorded in zone A.

Two Type of the Vehicle
The premium is less for Three-wheeler vehicles and premium registration in Four-wheeler or more in a commercial vehicle insurance policy.

No Claim Bonus (NCB)
No claim bonus is given under comprehensive policy on OD (on damage) premium. You get no claim bonus of up to 60%. No claim bonus is your price for renewing the in commercial vehicle policy on time.

GVW of the Vehicle
GVW means at the time of premium of commercial vehicle insurance also depends on the GVW or Gross Vehicle Weight. The premium increases for vehicles with higher GVW.

LCC of the Vehicle
LCC means Licensed Carrying Capacity in commercial vehicle insurance policy plays a contributory role in determining the insurance premium.

Cubic Capacity of the Vehicle
Premium rises in commercial vehicle insurance when the cubic capacity of the vehicle also increases.

How to calculate the cost of Commercial Vehicle Insurance Premium

The following steps help calculate the price of commercial car insurance cover-

  • IDV of the vehicle
  • Type and model of vehicle
  • Age of the Vehicle
  • Registration Place of vehicle
  • Fuel type of vehicle
  • Driving history and claim history
  • Choice of coverage

Things to check before buying Commercial Vehicle Insurance

Claim Settlement Ratio
Customer service is an important factor to consider before buying a commercial insurance policy. Always choose that insurance company that has a higher claim settlement ratio because that company will settle your claims at a high priority.

Pick the right insurance policy according to your budget. Price is based on the company name, the premium varies or add-on covers your choices.

Choose the right insurance policy cording to your requirements and needs. How much coverage insurance company is giving and which types of additional benefits they are offering.

The Network of Cashless Garages
Under the cashless garage, you will get cashless repairing services means you don’t have to spend any amount on your repairs.

Important to know what is not covered in your commercial insurance policy. Because at the time of claim your claim can be rejected if it falls under an exclusions list.

Add-on Cover in Commercial Vehicle Insurance policy

  • Zero Depreciation Cover
  • Personal Accident Cover
  • Depreciation Waiver Cover
  • Windshield Glass Cover
  • Legal Liability to Employees
  • Legal Liability to Passengers
  • Roadside Assistance
  • No Claim Bonus Shield Cover
  • Accessories Cover
  • Coverage for Vehicle Consumables
  • Penalty Coverage
  • Additional Cost Coverage
  • Towing Charges Coverage

Why should I Buy Commercial Vehicle Insurance?

Legal Protection
When you have valid commercial vehicle insurance it confirms that you are obeying the Indian law. Buying appropriate commercial vehicle insurance, you are protected against any third party liability or road accident.

Financial Protection
Choosing commercial vehicle insurance, you do not have to pay for the third party liability or costs that may occur due to your injury, death or any damage caused to your commercial vehicle. A commercial insurance policy provides coverage against the financial loss occurred at the time of accidental damages, natural disaster damages or man-made disaster.

Employee and Travelers Protection
Commercial vehicle insurance policy supports in case your employee becomes injured in a road accident at the time of driving the business vehicle during the working hours. It also covers legal liability against death or injury caused to the travellers by your vehicle.

Repairing Cost
In commercial vehicle insurance, you can get the cover for costly repairs for your vehicle.

Cashless Network Garages
In cashless network garages, the policyholder gets the benefits of cashless settlements on the heavily damaged cost of your commercial vehicle. The policyholder has no liability to pay the amount to the garage for repair of his commercial vehicle.

Peace of Mind
Commercial vehicle insurance is the best solution to full fill the heavy repairing costs that may occur due to the damages caused by a road accident or natural disaster. Policyholder is free from the sudden financial crunch.

Benefits of Buying a Commercial Vehicle Insurance

Cover for Third Party Liability
The commercial vehicle insurance policy provides protection against legal liability to the third party subsequent from injury, death and property damage with our vehicle. In the third party, the policyholder doesn’t get any claim for his own vehicle.

Cover for Own Damage
Under this insurance policy, any damages stated under the scope of policy coverage is insured to the policyholder which could be man-made damage, damage by natural calamities or damage by a road accident.

Medical Payments Coverage
Commercial vehicle insurance also provides cover against medical expenses that are suffered due to your injury caused by accident.

The benefit of Add-on Coverage
With this insurance policy, you can also include add-on covers such as zero depreciation, personal accident coverage for owner/driver, etc. Each add on the cover have their additional premium.

No Claim Bonus
Insurance company also offer a No Claim Bonus (NCB). It is a benefit for claim-free policy years for your commercial vehicle which will result in a less in premium at the time of renewal.

Exclusions in Commercial Vehicle Insurance

  • Damages are not covered if policyholder or driver is driving the vehicle under the influence of alcohol or drugs.
  • Loss and damages are not cover that is caused due to war and nuclear danger.
  • Accidental Damages are not covered if your commercial vehicle is involved in any illegal activity.
  • Losses and damages suffered while driving without having a valid license or valid policy.
  • Mechanical expenses due to consistent wear and tear.
  • Loss due to war, mutiny or nuclear risk
  • Use of the vehicle for a purpose not mentioned in the policy document.
  • Employees of the Insured other than the owner/driver of the commercial vehicle.