Commercial Car Insurance

Know about the types, benefits, and coverage details of a commercial vehicle insurance policy.
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Commercial Vehicle Insurance
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3 Mins
25-July-2023

Commercial vehicle insurance is a tailored motor insurance policy for commercial vehicles. These insurance policies cover vehicles like vans, taxis, and buses that are used for commercial purposes. This also includes trucks, trailers, tractors, and more. For businesses or individuals relying on vehicles for commercial operations, commercial motor insurance is immensely important. It covers the damages and losses to the commercial vehicle during its daily run.

What is a commercial vehicle insurance?

Commercial vehicle insurance is a type of insurance policy that provides coverage for vehicles used for commercial purposes, as stated above. Commercial vehicle insurance is mandatory for all types of commercial vehicles, including trucks, buses, taxis, etc., in India. Commercial vehicle insurance includes truck insurance, commercial car insurance, goods carrying vehicle insurance, etc.

This insurance policy provides coverage against losses or damages incurred from accidents, theft, and natural calamities. It also covers the legal liabilities of the vehicle owner arising from third-party property damage or bodily injury. You can purchase commercial vehicle insurance online, which makes the process simple and convenient. Adequate commercial car insurance coverage can protect your vehicle and business interests from unforeseen circumstances.

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Benefits of commercial vehicle insurance

Here’s a quick look at the benefits you get if you have a commercial vehicle insurance.

Key features

Details

Customisable IDV

Available

NCB benefits

Available

Cashless claims

Available

Coverage for damages to third party 

Available

Personal accident cover

Available

24x7 claim support

Available

Own damage cover

Available only in comprehensive policy

Online renewal 

Available

 

Why is commercial vehicle insurance important?

Commercial vehicles such as trucks, taxis, buses, and vans play an important role in business operations. Protecting these vehicles from damages or accidents is essential, and that is where commercial vehicle insurance can help. Here are the reasons why you should consider buying this insurance policy:

  • Commercial vehicle insurance protects you from accidents that can damage the insured vehicle as well as third-party property or individuals.
  • Commercial vehicle insurance saves you from paying exorbitant costs for the damages out of your own pocket.
  • Insurance policies also cover damages due to theft, fire, and natural disasters.
  • It is mandatory by law, making it a legal requirement for all commercial vehicles.
  • Proper insurance coverage can attract more clients and create a sense of trust and reliability.

Key features of commercial vehicle insurance

If your business owns one or many commercial vehicles, commercial motor insurance becomes a must for you. It financially covers your business from several losses and damages caused to and by your vehicle. Below are a few benefits of having commercial vehicle insurance:

  • Comprehensive coverage
    Policyholders get comprehensive coverage for both private and public commercial vehicles.
  • Third-party insurance
    The insurer takes care of the third-party liabilities in case of an accident, causing damage or injury to third party. It covers damages caused to the third party’s vehicle or property. It also covers any injury caused to the third party, even death.
  • Personal accident cover
    A personal accident cover provides financial coverage to the owner and the driver. This is in case of accidental injuries leading to hospitalisation.
  • Financial support
    Individuals with commercial vehicle insurance online can rest stress-free as the possible vehicle-related financial concerns will be taken care of by the insurance provider.

Why do you need Commercial Vehicle Insurance?

Any business, that operates vehicles like trucks, buses, taxis, etc., for commercial purposes, need to get a commercial auto insurance policy. This policy provides financial coverage in case of accidents, thefts, natural calamities, or any other unforeseen circumstances. Additionally, it covers the legal liabilities of the vehicle owner arising from third-party property damage or bodily injury.

For example, if you have a car used for commercial purposes, you should buy commercial car insurance. You can purchase commercial car insurance online, which is a quick and convenient way to ensure that your vehicles have the required insurance coverage.

How to buy commercial vehicle insurance

Purchasing commercial vehicle insurance is essential for protecting your business assets and ensuring legal compliance. Follow these detailed steps to secure the right policy for your needs:

  • Research providers: Compare different insurance providers to find one that offers the best coverage and customer service.
  • Select coverage options: Choose the coverage options that suit your needs, such as liability, collision, and comprehensive coverage.
  • Get a quote: Request quotes from multiple insurers to compare costs and benefits.
  • Complete the application: Fill out the application form with detailed information about your vehicle and business use.
  • Submit required documents: Provide necessary documents, including vehicle registration, driver's license, and any other relevant information.
  • Review and confirm: Carefully review the terms and conditions of the policy.
  • Make payment: Pay the premium through the preferred method (online, cheque, etc.) to activate your policy.

How to renew commercial vehicle insurance

Renewing your commercial vehicle insurance is crucial to maintaining continuous coverage and avoiding legal issues. Follow these steps to ensure a smooth renewal process:

  1. Log in: Access your insurer's website or mobile app using your credentials.
  2. Select policy: Navigate to the section where your existing commercial vehicle insurance policy is listed.
  3. Review policy details: Check your current policy details and make any necessary updates or changes.
  4. Submit documents: Provide any updated or additional documents if required.
  5. Calculate premium: Use the online calculator or get a quote for the renewal premium.
  6. Make payment: Pay the renewal premium using available payment options to continue your coverage without interruption.

Different types of commercial vehicle insurance

Primarily, there are two types of commercial car insurance policies:

  • Comprehensive commercial vehicle insurance
    Commercial vehicle insurance plan covers damages caused to the insured's vehicle due to robbery, theft, or fire. Also, due to floods, earthquakes, etc. This commercial insurance policy also covers the benefits of third-party insurance.
  • Commercial vehicle's third-party liability insurance
    A third-party commercial car insurance policy is mandatory by law. The policy covers damages and losses caused by your vehicle to any third party or their properties.

Add-on covers available on commercial vehicle insurance

You can also opt for several add-on covers with a commercial insurance policy. Some of them are:

  • Consumable cover
    This option covers screws, bolts, grease, and engine oil if any damage is caused by an accident.
  • Engine and gearbox cover
    This add-on coverage takes care of damages such as fluid leakage or water ingress.
  • EMI protection cover
    This add-on cover helps pay the EMI for a loan taken to buy the vehicle.
  • Roadside assistance
    Those opting for this additional coverage get roadside assistance if their vehicles break down due to a flat tyre, accident, or problems with the battery.
  • Loss of revenue
    The insurer compensates the loss of income if the vehicle is at a garage for repair due to accidental damages sustained.

Factors to look for while buying or renewing a commercial vehicle insurance policy

Here are some pointers to keep in mind while buying or renewing a vehicle or truck insurance policy online: 

  • Third-party insurance
    The Indian Motor Vehicles Act mandates every vehicle owner to have a third-party insurance policy to drive legally on the Indian roads. Hence, while choosing an insurance policy, ensure you get coverage for third-party liability.
  • Insured declared value
    The insurance companies consider the vehicle’s Insured Declared Value (IDV) to the set the maximum sum insured in the policy. Basis the IDV, you will get the sum insured in case of total loss or damage caused to your vehicle.
  • Claim settlement ratio
    Check the claim settlement ratio and process before buying a commercial vehicle insurance policy. Knowing the claim settlement ratio will help you understand the insurer’s credibility to pay the claim amount. Also, know the claim settlement process to avoid any hassle when making the claim.
  • Cashless garages
    Check the number of network garages associated with the insurer and their location. This will help you get cashless services to repair your vehicle hassle-free.
  • Deductibles
    You can opt for deductibles if feasible. You will have to pay a certain portion of the claim amount from your pocket. Check the terms and conditions applied to deductibles and how much percentage does the insurer offer. Based on that, evaluate whether you can afford it. If you choose deductibles, your premium value reduces.
  • NCB/discount
    For every claim-free year, you get a No Claim Bonus (NCB). Check the accumulated bonus value when renewing/transferring your commercial vehicle insurance policy.
  • Add-on benefits
    Comprehensive commercial insurance policies give you the option to add the add-on covers to your policy. You can enhance your regular insurance policy with add-on covers to stay adequately covered.

Key inclusions of a commercial vehicle insurance

A commercial car insurance policy covers the damages caused due to the following incidents:

  • Accidents
  • Theft
  • Fire
  • Natural disasters
  • Personal accident
  • Third-party losses
  • Towing disables vehicles

Key exclusions of a commercial vehicle insurance

A commercial vehicle insurance policy does not cover the damages caused in the following situations:

  • Own damages for the third-party policyholder
  • Drunk driving or driving without a licence
  • Contributory negligence
  • Consequential damages

Types of commercial vehicles covered under commercial vehicle insurance

Here are the types of commercial vehicles covered under a commercial vehicle insurance policy:

  • Passenger-carrying vehicles, such as cabs, taxis, auto-rickshaws, private buses, etc.
  • Goods carrying vehicles, such as trucks, lorries, etc.
  • Miscellaneous and special vehicles, such as mining and farming vehicles.

Documents required to claim commercial vehicle insurance

Given below is a list of documents that one needs to provide while claiming commercial vehicle insurance:

  • Accident details: Date, time, location.
  • Police report: If applicable.
  • Claim form: Obtain from the insurer.
  • Policy information: Policy number, holder's details.
  • Driver and vehicle information: Driver's name, license, contact, vehicle’s make, model, VIN, license.
  • Third-party information: Other party details, if applicable.
  • Photographs and evidence: Accident scene, damage, if available.
  • Estimates and repair invoices: From repair shop.
  • Medical records: in case of injuries.

How to file a claim for commercial vehicle insurance?

One can follow these simple steps to raise a claim online:

Step 1: Contact the insurer and fill up the claim form.

Step 2: Submit all relevant documents.

Step 3: A surveyor will conduct an evaluation of the damages in the vehicle and report the same to the insurer.

Step 4: After the insurer accepts the claim, you will receive the claimed amount.

How to calculate commercial vehicle insurance premium?

The premium for commercial vehicle insurance depends on factors such as vehicle type, usage, age, and location, among others. Calculating the premium beforehand ensures that business owners can budget and plan effectively, thereby avoiding any unwanted surprises in the future. By selecting a suitable policy according to their specific requirements, commercial vehicle insurance provides peace of mind to business owners and protects them from any financial risks.

You can calculate the commercial vehicle insurance:

Premium= Own damage – (NCB + Discount) + Liability premium

Commercial vehicle insurance from Bajaj Finance: What makes it a good decision

Bajaj Finance partners with top insurers to offer the best insurance policies, considering customer’s demands and requirements.

Here are the reasons to opt for a commercial vehicle insurance policy from Bajaj Finance:

  • Comprehensive coverage for a wide range of losses and damages
  • A paperless policy claim process
  • 24-hour customer support team
  • Lucrative facilities, such as personal accident cover, compulsory deductibles, legal liability cover, etc.
  • Online insurance purchasing and renewal

If you are searching for a dependable commercial vehicle insurance plan, choose from a selection of plans available on Bajaj Finance Insurance Mall.

Frequently asked questions

Do I have to change my car insurance policy if I change the car registration from private to commercial?

Yes, you need to buy a new commercial car insurance policy. The coverages offered under commercial insurance policies differ from regular car insurance policies. You can check with insurer whether you can transfer any benefits from your previous car insurance policy. This would depend on the insurer’s terms and conditions.

What documents you need to submit when filing a commercial vehicle insurance claim?

You need to share the following documents with the insurer when raising a commercial vehicle insurance claim.
1. Duly signed claim form
2. Vehicle registration copy
3. Driving licence copy
4. Original policy documents
5. FIR copy
6. Routes permit
You must check with your insurer if more documents required. The document requirements vary from insurer to insurer.

What is the difference between comprehensive and third-party commercial vehicle insurance?

A third-party insurance for commercial vehicles only covers damages and losses caused to a third party. For example, their property, vehicle, or the person. The Motor Vehicles Act mandates every vehicle owner to have a third-party insurance policy.
A comprehensive commercial vehicle insurance covers third-party liabilities and damages caused to own vehicle. This insurance policy comes at higher premium than a third-party insurance policy, as it provides comprehensive coverages.

What kind of risks does a third-party commercial vehicle insurance cover?

A third-party insurance policy covers the death or injury of a third party due to an accident where you are at fault. It also covers the damages caused to the third party’s property or vehicle.

Where can I repair my commercial vehicle in case of damage?

You can get the vehicle repaired at any of the insurer’s network garages. This will give you the benefit of cashless repair services. If you choose to get the vehicle repaired at any of your preferred garages, you may have to clear the bills. You can later submit the bills to the insurer to get a reimbursement.

What should I do if my commercial vehicle gets into an accident?

Contact your insurer to inform about the accident and the extent of damages sustained. If you choose cashless services to repair the vehicle, the insurer will send someone to tow the vehicle to the nearest network garage.
Meanwhile, you need to lodge an FIR at the nearest police station. Get a copy of the FIR to submit to the insurer. Record the incident on the phone and take photos of the damages caused to the vehicle. You will have to share these proofs with the insurer when raising claim.
Read the policy documents when buying the commercial vehicle insurance to know the procedures in detail. You will know about the benefits, coverage, and limitations in the policy documents. It will help you when raising the claim for damages or losses.

What is IDV in my commercial vehicle insurance policy?

IDV stands for ‘Insured Declared Value’. It is the vehicle’s current market value and is the maximum amount that your insurer will pay in case of theft or total loss. The insurer calculates the IDV of your commercial vehicle based on its age, make, model, and other factors.

How do I calculate the commercial vehicle Insurance premium?

Commercial vehicle insurance premium depends on factors such as the vehicle type, location, vehicle age, the purpose of use, and risk. The higher the risk, the higher the premium. The premium amount can also vary depending on the coverage options selected, including third-party liability, comprehensive coverage, and add-ons.

What is the policy term of a commercial vehicle insurance policy?

The period of a commercial vehicle insurance policy can vary from one year to three years. The policyholder can choose the policy term as per their preference. However, you must choose a longer policy term to avoid the hassle of renewing the policy every year.

How do I cancel the commercial vehicle insurance plan?

If you wish to cancel your commercial vehicle insurance plan, you can contact your insurance provider and submit a written request for cancellation. The insurance provider will then initiate the process of cancellation and refund the premium amount based on the terms and conditions of the policy.

What does commercial car insurance cover?

Commercial car insurance covers the risks involved in using a vehicle for business purposes. It offers financial coverage against losses or damages resulting from accidents, thefts, and natural calamities. It also covers third-party liabilities, including property damage or bodily injury caused to them. You can customise commercial car insurance with add-on covers as per your requirements.

Do I need commercial car insurance?

If you use your vehicle for commercial purposes, then commercial car insurance is mandatory as per Indian law. Commercial car insurance covers the risks involved in using the vehicle for business purposes, securing you financially in case of any unforeseen circumstances.

How to make a claim on commercial car insurance?

In case of an accident or any loss or damage, the policyholder should immediately inform the insurance provider and file a claim. To file a claim, you must furnish documents like the claim form, FIR (in the case of accidents), repair bills, and other relevant documents. The insurance provider will then assess the claim and initiate the settlement process as per the terms and conditions of the policy.

What is the time period of commercial vehicle insurance?

Commercial vehicle insurance policies typically cover a period of one year. Policyholders need to renew their insurance annually to maintain continuous coverage and comply with legal requirements.

What is the life of a commercial car?

The life of a commercial car in India is generally considered to be 15 years, after which it may need to undergo fitness tests and renewals to continue operating legally.

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