All You Need To Know About Commercial Vehicle Insurance

Commercial vehicle insurance can really be extremely beneficial in case of an automobile-related crisis. Such kind of insurance can help save commercial vehicle owners a lot of money which goes in repairing any damage due to any unforeseen event. Different types of commercial vehicles include cabs and taxis, trucks, lorries, buses, auto rickshaws, school vans, among others.

Here’s a guide which explains in detail about the commercial vehicle insurance in India and how one can save all their hard-earned money by investing in the commercial car insurance policy.    

What is Commercial Vehicle Insurance?

A Commercial Vehicle Insurance is a customized kind of insurance policy which is designed to cover the damages caused to or by a commercial vehicle. It also covers the losses caused to the owner-driver of that particular commercial vehicle. The damages and losses include accidents, collisions, man-made and natural calamities.

In India, it is compulsory for all businesses to cover their commercial vehicle such as for trucks, buses, auto-rickshaws, tractors, commercial vans, amongst others at least with third-party insurance policy, that protects third-parties against any damages which could be caused by your commercial vehicle.

Vehicles Covered in Commercial Vehicle Insurance

Passenger Vehicles: Vehicles such as cabs, taxis, rickshaws, school buses, private buses, among many others that generally can carry at least one passenger are known as passenger-carrying vehicles.

Goods Vehicles: Vehicles which are mainly used to carry goods and transport from one place to another such as mini trucks, tempos, vans, lorries. As these vehicles are large in their size they carry more risk.

Special Vehicles: Special vehicles which are extensively used for business or commercial reasons such as trucks, taxis, buses, cabs. These vehicles are generally used for mining, farming or construction activities.

Types of Commercial Vehicle Insurance

Third-party Commercial Vehicle Insurance: This kind of policy is mandatory in India without which commercial vehicles cannot drive on Indian roads. This policy comes at a lower premium cost which tends to cover the damages caused to any third-party person or property from your own commercial vehicle. Third-party liability policy also covers injury and death of the owner/driver.

However, it only covers third-party damages and therefore, any own damages or loss caused to your vehicle will not be covered.

Comprehensive Vehicle Insurance Policy: It is highly recommended to buy comprehensive package policy which will financially safeguard your own commercial vehicle, and the owner-driver using it as well. This policy provides 360-degree protection to your commercial vehicle and covers any damages or loss caused to your vehicle due to natural calamities, fire, theft or any accidents.

Benefits of Commercial Vehicle Insurance

• It protects you from any kind of financial burden which might be caused by accidental damages.
• Third-party policy also covers the lawsuit and legal fees in case of any damage to third person/property caused by your vehicle.
• If no claim is made during the policy period, the no-claim bonus is awarded at the time of renewals.
• The CV insurance policy can be written off in books as “business expense” and can be counted as tax deductible.
• It also offers cashless repair coverage due to damage in case of an accident.

What is Covered in Commercial Vehicle Insurance?

• Accidents: Damages caused to commercial vehicles by any kind of collisions in case of any accident.
• Theft: Loss or damage of a commercial vehicle due to theft.
• Fire: Damages caused to the commercial vehicle due to a fire.
• Third-party Damage/Losses: Any damages or losses caused by your commercial vehicle to a third party.
• Natural Disaster: Damages caused to the commercial vehicle due to any natural calamity such as landslide, flood.

Add-ons Available with Commercial Vehicle Insurance

There are several optional add-ons covers which provide additional coverage and benefits at an extra premium cost. The policyholder can buy these add-ons as per their choice and requirements. Let’s have a look at some of the optional add-on riders which can be purchased with comprehensive insurance policy.

• Engine and gearbox are protected.
• Zero depreciation cover
• Parts depreciation protects.
• Consumable cover
• Breakdown assistance
• EMI protection cover
• Return to invoice
• Key and lock replacement

What is Not Covered in Commercial Vehicle Insurance?

• If the policy is a third-party liability policy, then damages to your commercial vehicle will not be covered.
• Drunk riding without having a valid license.
• War and nuclear perils.
• Any damages which are the indirect result of any accident or natural calamity such as loss of earnings.
• Any damages resulting due to negligence on the part of the driver such as driving the vehicle in an existing flood like situation.
• No coverage for claims which falls outside the contract.
• No coverage for electrical or mechanical breakdown. 

Factors Affecting Commercial Vehicle Insurance Premium

Location Or Registration Zone: Each location across the country carries specific risks, which is why location plays a major role in deciding the premium for your commercial vehicle. For instance, zone 1 which majorly has metro and bigger cities such as Delhi or Mumbai will attract more premium than those cities which fall in zone 2 category.

Make of the Vehicle and Its Engine Model: Factors such as engine model, year of manufacturing, size of the vehicle, condition of the vehicle also plays a major role in influencing your premium.

No-Claim Bonus: You will get a premium at discounted rate, if you have accumulated no-claim bonus in the previous years of insurance policy. No-claim bonus is a kind of reward which is given to the insured at the time of renewals, if there has been no claim made in the preceding years of the policy.

Type of Plan Chosen: If you have chosen a simple basic plan such as third-party liability insurance, then the premium would be comparatively less than a comprehensive plan which has broader coverage.  

Type of Commercial Vehicle: Large vehicles such as trucks or big buses carry more risk on roads than other commercial vehicles like cab or private mini bus. More risk means more premium has to be shelled out to cover large commercial vehicles.

List of Top Insurers Providing Commercial Vehicle Insurance

• HDFC ERGO General Insurance.
• Reliance General Insurance.
• Bajaj Allianz General Insurance
• Royal Sundaram General Insurance.
• Chola MS General Insurance.
• Kotak General Insurance.
• Go Digit General Insurance.
• Acko General Insurance.
• ICICI Lombard General Insurance.
• IFFCO TOKIO General Insurance.
• SBI General Insurance.
• Tata AIG General Insurance.
• The New India Assurance.
• The Oriental Insurance.
• Universal Sompo General Insurance.

How To Buy Commercial Vehicle Insurance Online?

• Step 1 : Visit the insurance company’s website and fill in the necessary details.
• Step 2: Now click on the “buy commercial vehicle policy” button.
• Step 3: Select the type of coverage and add-ons carefully and submit the required documents. 
• Step 4: Pay the premium amount via any of the online payment modes.
• Step 5: The new policy will be shared to you on your registered email-id or WhatsApp.

Step-By-Step Guide To File A Claim For Commercial Vehicle Insurance

• Step 1: In case of theft or damages caused to your commercial vehicle, reach out to the toll free helpline number or log in to the official website of the insurance company.
• Step 2 : Click a few pictures or make videos of the loss, if possible and submit it to the insurance company.
• Step 3: The insurance company will appoint a surveyor or a claim inspector who might visit the site of the loss within 24 hours.
• Step 4: Submit the relevant documents to the surveyor, who will further submit the final report to the insurance company.
• Step 5: The claims department of insurance company will verify the documents and look into the final survey report
• Step 6: If everything is ok, then the insurance company will initiate the general insurance claim settlement process and you will receive the payment soon.