Commercial Vehicle Insurance is a type of motor insurance policy that provides coverage in case of damages or
losses caused by or to a commercial vehicle and its owner-driver. It is a customized motor insurance policy that
can include losses and damages in the situation of an accident, natural calamities, collisions, fire, etc. All
businesses must purchase a commercial vehicle insurance policy for their motor vehicles like pick-up vans, cabs,
auto-rickshaws, tractors, school buses, trucks, commercial vans, etc.
Commercial vehicles are an important mode of transportation and are heavy-duty vehicles, which are used on an
everyday basis to carry out tasks. These vehicles usually include trucks, vans, trailers, buses, taxies,
coaches, carriers, shovels, tractors, cranes, mobile rigs, bulldozers, etc. that are used to transport goods
within the city/cities and from one state-to-another. They are also used for inter-city passenger tours and
travel.
These heavy-duty commercial vehicles have an important contribution to bulk transportation for many businesses.
However, such heavy-duty commercial vehicles are always prone to road accidents, unpredicted damages while
driving and natural calamities.
Therefore, commercial vehicle insurance is important to covet these sets of wheels against the odds. Tractor
insurance, insurance for covering goods carrying trucks, commercial insurance for pick-up vans etc.
Commercial vehicle insurance is beneficial for the smooth functioning of your running business against any
adverse situations that may cause a huge financial drain. Almost every type of vehicle that is used for
commercial purposes such as passengers carrying vehicles, private/public travel trailers, taxis, tractors,
cranes, mobile rigs, bulldozers, etc. gets covered under comprehensive commercial vehicle insurance.
Buying commercial vehicle insurance online is a quick, easy and hassle-free process. Therefore, before you zero
down the policy, compare commercial vehicle insurance quotes and purchase a policy that fits your budget.
Remember, any mishap while riding a commercial vehicle without valid commercial vehicle insurance can lead to a
huge monetary loss and put anyone in a difficult situation.
Commercial vehicle insurance plans come loaded with some salient features. The following are the salient features
offered under commercial vehicle insurance:
- Comprehensive coverage is provided to both public and private carriers including special types of goods
carrying vehicles.
- The commercial vehicle insurance plan provides cover for the liabilities in case of any injury or an
accident.
- Do not worry about the unwanted expense as having a commercial vehicle insurance plan will provide monetary
compensation.
- Remain stress-free from monetary setbacks incurred due to liabilities.
- Third-party person/vehicle/ property damage cover.
- A personal accident cover for the driver and the owner.
- Protect your most valuable assets.
- Cover driver, helper and conductor with your vehicleās insurance.
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Commercial vehicle insurance is generally of two types listed below:
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Comprehensive Commercial Vehicle Insurance
Comprehensive insurance offers complete protection to your commercial vehicle under any adverse
circumstances, which may lead to an unwanted expense. Secure your commercial vehicle from uncertainties such
as damage, fire, theft, robbery, flood, earthquake and so on. Besides, comprehensive vehicle insurance
policy provides cover to third-party property or person in case of loss/damage.
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Third-party Liability Commercial Vehicle Insurance
Commercial vehicle insurance third-party liability offers protection to any third-party property, any third
person or the vehicle, which may lead to the demise, bodily injury or any other damage. The safety of these
types of commercial vehicles should be of utmost concern. Besides, the scope of coverage is more or less the
same for both the insurance policies.
Commercial vehicle insurance policy compensates for personal, medical, and financial losses that are incurred due
to damage resulting from theft, accidents, and natural disasters.
Most of the commercial vehicle insurance companies provide cashless compensation for getting your commercial
vehicle repaired at their registered workshops.
There are a plethora of commercial insurance companies that provide customized commercial vehicle insurance plans
to meet the different needs of their customers.
Here is a list of the benefits that commercial vehicle insurance policy offers:
Loss/ damage to the insured commercial vehicle resulting due to:
- Fire, self-ignition, explosion or lightning
- Riots and strike
- Theft, housebreaking, and burglary
- Malicious acts
- Flood, hurricane, tempest, storm, and typhoon
- Hailstorm, inundation cyclone, frost
- Landslide and rock slide
- Earthquakes
- Terrorist activity
- Accident (by external means)
Personal Accident claims are also covered under this policy. It includes permanent total disability/
accidental death of the paid driver and the owner.
Commercial vehicle third-party insurance provides cover in case of an accident involving your insured
commercial vehicle and a third-party vehicle. It will cover the loss or damage caused to the third-party
property, vehicle, bodily injuries and death.
An option to boost the policy benefit by opting for various add-on covers, at an additional
premium.
Prevent unnecessary losses to your business.
Get instant plans for your commercial vehicle
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You can also enhance your scope of commercial vehicle insurance coverage by opting for add-on covers on the
payment of an additional premium. While buying commercial vehicle insurance comparison the add-on covers will
help you to make an informed decision.
The following are some add-on covers that you may consider while buying commercial vehicle insurance online:
- Accessory Cover: Cover for loss of accessories.
- Legal Liability : Legal liability covers to the paid driver/conductor/non-fare paying
passengers.
- Personal Accident Cover: Personal accident benefit to the owner/driver and any other named
person apart from an employee and vehicle cleaner/ conductor/ paid driver.
- Zero Depreciation Cover: To get the full value of the vehicle in case of loss or damage
- Towing Cover: Road-side assistance in case of sudden break-down of the vehicle.
- Engine Protector: It covers the consequential damages to the vehicle engine.
The policy does not cover any claim arising out of the following situations:
- Wear and tear of the commercial vehicle.
- Consequential loss.
- A loss incurred during a civil war.
- Contractual liabilities are also not covered.
- The occurrence of an accident while driving with an invalid driving license or under the consumption of
alcohol.
- Using a vehicle in accordance with ‘limitations as to use’ for instance, a private car is used as a taxi.
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- War perils, nuclear perils.
- Electrical and Mechanical breakdown, breakage or failure.
- In case, the policy is not active at the time of accident or loss.
Now, let us understand the different insurance plans available for every category of commercial vehicle.
Goods Carrying Vehicle Insurance
Goods carrying vehicle insurance covers the vehicles against loss or damages due to man-made and natural
calamities such as theft, fire, explosion, flood, earthquake, landslide, accidental damages, personal accident
and third-party liability. Goods carrying vehicles help in smooth growth of the nationās economy by transferring
the goods within the country and globally.
The goods carrying vehicle insurance can be bought for vehicles such as trucks, trailers, tractor-trailers, etc.
Salient Features of Goods Carrying Vehicle Insurance:
Listed below are some of the key features of goods carrying vehicle insurance:
- The policy offers both third-party liability and own-damage cover.
- Goods carrying vehicles such as trucks, trailers, Tractor-Trailer etc. can be insured under goods carrying
vehicle insurance, for example truck insurance to cover goods carrying trucks.
- Cashless claim facility to be availed across the country at registered garage.
- The policy benefits can be enhanced further by opting for various add-on covers.
- The insured vehicle is covered for loss or damages sustained during an accident, third-party liability,
damages due to man-made disasters such as theft, vandalism etc.
- It covers natural calamities causing a threat to the insured vehicles such as flood, storm, earthquake,
landslide etc.
- No Claim Bonus to be earned for every claim-free year up to a defined percentage based on the policy terms.
Goods Carrying Vehicle Insurance: Inclusions
The list of inclusions for goods carrying vehicle insurance includes:
- Third-Party Liability Cover: The policy covers the insured vehicle for any liability
arising out of accidental injury, bodily damage or death of a third party.
- Loss Due to Natural Disasters: Damage, loss, or due to natural calamities are covered. For
example, if your goods carrying pick up van gets damaged due to a cyclone, your pick up van insurance will
cover the losses incurred.
- Man-made Calamities: Man-made disasters such as theft, vandalism etc. are covered, where
the insured pays up to the full value in case the vehicle is untraceable, under ātotal lossā category.
- Personal Accident Cover: Owner/driver is covered for personal accidental damages or loss up
to a certain percentage of Sum Insured, including the treatment cost. On payment of an extra premium, even
co-passengers can be covered.
- Loss Due to Natural Disasters: Damage, loss, or due to natural calamities are covered. For
example, if your goods carrying pick up van gets damaged due to a cyclone, your pick up van insurance will
cover the losses incurred.
Goods Carrying Vehicle Insurance: Exclusions
The list of exclusions for goods carrying vehicle insurance includes:
- Illegal Driving: If you do not have a valid and authorised driving license, your goods
carrying vehicle insurance is of no use. If you drive under the influence of alcohol or drugs then you are
not covered under goods carrying vehicle insurance policy.
- Mechanical and Electrical Breakdown: Any mechanical and electrical breakdowns are not
covered by your goods carrying vehicle insurance policy.
- Depreciation: Goods carrying vehicle insurance plan does not offer coverage against
depreciation in the value of the vehicle over the period.
Passenger Carrying Vehicle Insurance
Passenger carrying vehicle insurance provides coverage against accidental damages, fire and explosion, man-made
calamities such as theft, natural calamities, personal accident, along with third-party liability cover. The
passenger-carrying vehicles are intended for the carriage of passengers.
Passenger Carrying Vehicle Insurance Features
Below are the key features of passenger carrying vehicle insurance:
- This insurance can be bought for various passenger-carrying vehicles such as bus, taxi, passenger-carrying
vans etc.
- The policy premium is decided based on the type of vehicle, cubic capacity, the zone of registration,
Licensed Carrying Capacity of the vehicle, Gross Vehicle Weight etc.
- The policy covers the insured vehicle for the damages due to man-made and natural calamities.
- No Claim Bonus to be earned for every claim-free year.
- Some insurers offer discounts on premium deepening on the mode of buying.
Passenger Carrying Vehicle Insurance Inclusions
The inclusion list of passenger carrying vehicle insurance includes:
- Cover for Accidental Damages: The policy covers the vehicle in case of an accident leading
to damages or injuries.
- Cover to Natural Calamities: Natural calamities may take a toll over the vehicle. Do not
worry, it is covered as well.
- Fire & Explosion: Total or partial loss of the vehicle due to fire or explosion is covered.
- Personal Accident Cover: Cover to owner-driver and co-passengers (with an extra premium)
are offered in case of an accident leading to injury, disability or death.
- Liability Insurance: In the case of third party liability any accidental injury, damage or
death of a third party, damage to the third-party property where the insured vehicle is at fault, is
covered.
Passenger Carrying Vehicle Insurance Exclusions
Passenger carrying vehicle insurance does not cover the following:
- Illegal Driving: In case you do not possess an authorized driving license, your
passenger-carrying vehicle insurance cannot help you. If you drive your vehicle under the influence of
alcohol or drugs are not covered under the plan.
- Mechanical and Electrical Breakdown: Any mechanical or electrical breakdown is not covered
under your passenger-carrying vehicle insurance policy.
- Depreciation: Depreciation in the value of your vehicle over a period also remains
uncovered. Thus, while claiming your passenger carrying vehicle insurance, your insurer will compensate up
to the IDV (insured declared value or current market price) of the vehicle after deducting the cost of
depreciation.
Auto Rickshaw Insurance
Auto Rickshaw Insurance is a subcategory of Passenger Carrying Vehicle Insurance. The Motor Vehicle Act in India
mandates buying liability only policy if auto-rickshaws are owned by an organization.
This will provide a cover for business if the rickshaw causes loss or damage to the third-party property, person,
or vehicle.
Key Features of Auto Rickshaw Insurance
Following are the salient features of auto-rickshaw insurance policy:
- It protects your auto and the owner/driver from any losses arising out of natural calamities, terrorist
activities, fires, accidents, malicious acts, and theft, amongst other unfortunate events.
- Auto rickshaw insurance also assures passengers/customers that you have a responsible business.
Auto Rickshaw Insurance: Inclusions
Auto rickshaw insurance covers the following:
- Cover for Accidental Damages: This policy covers the auto in the case of an accident that
leads to damages or injuries.
- Cover Against Natural Disasters: Natural disasters may take a toll over your auto. There is
nothing to worry about; an auto-rickshaw insurance policy offers cover against any Natural Disasters.
- Fire: Total or partial loss caused to the auto-rickshaw due to fire is also covered.
- Personal Accident Cover: Coverage to owner-driver and co-passengers is provided in case of
an accident leading to death, disability, or injury.
- Third-Party Loss: Any losses or damages caused to a third-party or the passengers by your
auto-rickshaw are also covered.
- Theft: This policy also covers your auto-rickshaw in case of any loss or damage caused due
to theft.
- Towing Disabled Vehicles: Auto rickshaw insurance policy also offers coverage against any
damage caused to your auto in the case where it is being towed.
Auto Rickshaw Insurance: Exclusions
The following are not covered under the Auto Rickshaw Insurance Policy:
- Drunk riding or driving without a License
- Own damages for third-party insured
- Consequential damages or losses
- Contributory negligence
E-Rickshaw Insurance
E-Rickshaw along with e-carts are now registered and come under the Motor Vehicles Amendment Act 2015. The
Insurance Regulatory and Development Authority (IRDA) mandates third-party insurance for battery operated
3-wheeled vehicles.
The insurance norms and procedures of e-Rickshaw insurance are similar to an auto-rickshaw insurance policy.
However, only third-party insurance is available for e-Rickshaws. The amount of premium is based on the seating
capacity of the vehicle.
Documents Required to Claim Commercial Vehicle Insurance
To claim commercial passenger vehicle insurance or goods carrying vehicle insurance, you will need to furnish the
following documents:
- Registration certificate of the vehicle
- Driving license ( original copy)
- Claim form duly signed and filled
- Copy of FIR
- Tax paid receipt
- Copy of Aadhar Card
- Fitness certificate
- Original insurance policy papers
- Load challan of your commercial vehicle
- Route permit
Factors To Be Considered While Buying/Renewing Commercial Vehicle Insurance
While renewing or buying a commercial vehicle insurance policy, you should focus on the following aspects:
- Coverage: It is important to have adequate coverage when buying a commercial vehicle
insurance policy. A comprehensive commercial vehicle insurance policy is recommended for those who wish to
safeguard their business and want to enjoy and have peace of mind.
- Insured Declared Value: One of the most important things that one needs to consider at the
time of renewal/buying is choosing the correct IDV in your motor insurance policy, as the compensation
amount will be equal to the IDV in case of total damage or theft.
- Discount/NCB: At the time of renewal, the policyholder should check with the insurer for
any available discounts on the motor insurance premium.
- Add-on Benefits: Select add-on covers to enhance the overall policy commercial vehicle
insurance coverage.
- Cashless Network Garages: Always ask the commercial vehicle insurance agent or provider
about the list of network garages and find one within your vicinity. It will ensure convenient and timely
repair of the vehicle.
- Deductibles: Opt for deductibles only when it is possible to pay a portion of the claim
from your pocket. Always check for the deductibles and clauses at the time of renewal. Opt-out for
deductibles if it is not working well for you.
Note: While buying commercial vehicle insurance online, it is important to browse the web,
compare commercial vehicle insurance quotes and avail the best deal.
What are the Factors That Determine Commercial Vehicle Insurance Price?
The following parameters are considered while determining the price of commercial vehicle insurance e.g. goods
carrying vehicle insurance or passenger carrying vehicle insurance:
- IDV of the vehicle
- Age of the vehicle
- Zone of Registration
- Type and model of the vehicle
- Fuel type of vehicle
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What is IDV in my Commercial Vehicle Insurance policy?
The IDV of a commercial vehicle/car/taxi is derived on the basis of the selling price listed by the
manufacturer for a particular brand or model at the time of buying or renewing the policy. It is then
adjusted for depreciation as per the age of the vehicle.
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How is my Commercial Vehicle Insurance premium calculated?
Factors that affect/reduce car insurance quote are:
- Cubic Capacity (CC) of the vehicle
- Insured Declared Value
- City of Registration
- Vehicle Model
- Age
- Coverage type ( comprehensive insurance/third party liability only policy)
- Add-on benefits like roadside assistance, fuel assistance, etc.
- No-Claim Bonus
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What is loaded in a Commercial vehicle insurance policy?
At the time of renewal, some motor insurance providers add an extra cost of your car insurance premium in
the form of Loading. Usually, it comes into effect when the risk associated with an auto insurance
policy owner is declared as higher than normal.
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What does Constructive Total Loss mean?
The vehicle is declared as a constructive total loss if the cost of accidental loss or damage repair is
more than the current market value.
When a constructive total loss claim is filed then you would need to surrender your commercial vehicle to
your motor insurance provider. Vehicle ownership is also transferred to the insurer.
The insurance provider will pay the Insured Declared Value of your vehicle after adjusting the cost of
deductibles. Once your claim is settled your motor insurance policy will stand canceled. Once you get
the final payment, you are no longer required to pay the premium amount until the policy is renewed.
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What is IDV in my Commercial Vehicle Insurance policy?
The IDV of a commercial vehicle/auto is derived on the basis of the selling price listed by the
manufacturer for a particular brand or model at the time of buying or renewing the policy. It is then
adjusted for depreciation as per the age of the vehicle.
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How to make an accidental claim on commercial vehicle insurance?
- Report the loss/damage of the vehicle immediately on the insurance company toll free no. or on their
website. Provide policy no. as reference.
- Fill up the claim form and attach a copy of driver’s driving license and Registration
certificate.
- Cashless claim facility can be availed at company’s registered garages.
- If the garage doesn’t come under the company network then claim reimbursement is taken
afterwards with proper documents.
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What is cashless and non-cashless/reimbursement claim Under Commercial Vehicle Insurance?
Cashless Claim means that the insurer will not be dealing with any physical cash while settling a claim.
The insurer will pay the garage directly for the repair. This is only possible if the garage that the
insurer took the vehicle to is part of the listed network of garages that the company is associated
with.
Non-Cashless / Reimbursement Claim means that the insured chose a garage that is not part of the
company’s network. In this case, the insured will need to pay the cash to the garage directly and
it will be reimbursed when they produce the same original bills and payment receipts to the insurer.
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What is the amount to which I need to insure my commercial vehicle? How is it related to the IDV of the
vehicle?
You need to insure your commercial vehicle to the amount equivalent to its Insured Declared Value or the
IDV. Under commercial vehicle insurance, the IDV amount refers to the maximum amount up to which an
insurance company will cover the partial/ total damage sustained on the vehicle. You cannot opt for
coverage of more than the IDV of your commercial vehicle. Moreover, you can estimate the IDV of your car
by reducing the depreciation amount from the ex-showroom price of your vehicle model.
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Which commercial vehicle insurance cover should I buy? Why is comprehensive commercial vehicle insurance
more expensive than liability only insurance policy?
You should buy an auto insurance policy that at least offers liability only policy coverage. This is
because buying a liability only policy is mandatory for all auto rickshaw owners under the Motor Vehicle
Act of India. However, you have the freedom to opt for a comprehensive auto insurance policy that offers
broader coverage including damage/ loss due to fire, natural disasters, accidents, theft as well as own
damage cover in addition to the liability only cover.
While a liability only auto rickshaw insurance policy only covers third-party liabilities, a
comprehensive policy also covers damages caused to the driver and the vehicle due to external factors
besides the third-party liabilities. As a result, a comprehensive auto insurance policy is more
expensive than a liability only policy.
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What is the period of a commercial vehicle insurance policy?
Usually, a commercial auto insurance policy covers the insured vehicle for a period of one year. Few
insurance companies may also offer policies with tenure of up to 2 years or 3 years. Therefore, you
should check with your insurance provider about the various policy tenure options offered under their
commercial auto insurance.
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Can I continue the commercial vehicle insurance in the name of the earlier owner even after the vehicle
has been transferred to my name and the same has been updated in the RTO records?
No. You cannot continue with the commercial vehicle insurance in the previous owner’s name if you
are the new owner of the vehicle and the information has been updated in the RTO records. This is
because the policyholder and the vehicle owner should be the same person with the same address. You will
have to get the policy transferred to your name in order to continue the insurance coverage on your
vehicle. Not getting the policy transferred is a punishable offence. Moreover, such a policy will be
equivalent to zero insurance coverage as all your insurance claims will be denied by the insurer.
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What are the documents that must be submitted for a commercial vehicle insurance claim?
At the time of filing a commercial vehicle insurance claim, you will have to submit the following
documents in support of your claim:
- Vehicle registration certificate or RC
- Original copy of the driving license
- Duly signed claim form
- Policy document in original
- Copy of the FIR
- Copy of Aadhaar Card
- Load challan of the vehicle
- Receipt of paid tax
- Certificate of fitness
- Route permit
- Original loss estimate
- Original vehicle repair receipt
- Vehicle keys (in case of theft)
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Can a person be covered by a commercial auto insurance policy if he uses his own vehicle on the job?
No. If a person uses his personal vehicle on the job, he will not be covered under the commercial auto
insurance policy. Whether he uses his private vehicle to attend a business meeting or to run a business
errand, it will not be covered under the commercial vehicle insurance.
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How to cancel a commercial vehicle insurance plan?
You can cancel your commercial vehicle insurance plan, provided the policy has not expired and no claims
have been made on it. If you satisfy both of these conditions, then you need to inform your insurance
provider about your wish to cancel the policy. Submit the documents or information required by your
insurance provider. Once you submit the details, your insurance company will cancel your commercial
vehicle insurance policy within a couple of weeks.