What is Commercial Vehicle Insurance – Get Full Policy Details

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Updated on Jul 13, 2022

Are you aware of commercial vehicle insurance? Do you know how this insurance can serve your purpose if you are operating a business and use vehicles for commercial purposes? Read on to know more.

Every vehicle that plies on the Indian roads need compulsory vehicle insurance. For business owners, who use commercial vehicles for the smooth running of their business should have their vehicles insured. Business vehicles like the ones that carry passengers, goods etc. are all required to be insured with comprehensive insurance coverage. Commercial vehicles are also prone to road mishaps and accidents, which might result in damage and liability and might hamper your business adversely. So, it is important to have commercial vehicle insurance.

What is Commercial Vehicle Insurance Policy?

Commercial Vehicle Insurance: It is a kind of auto insurance that covers against any liability caused by an accident that involves a third-party and that causes loss, damage etc. to the vehicle. These insurances also cover natural and man-made disasters. They cover the driver and the owner of the vehicle under personal accident coverage.  These types of insurance are known as commercial insurance and they are usually associated with commercial cars, commercial trucks to carry goods, auto-rickshaws, cabs, tractors, vans, buses, and so on.

Thus, commercial insurance is a personalized auto insurance policy that protects commercial vehicles and their owner/driver against damages and losses. Such damages and losses might occur due to accidents, natural disasters, crashes, fire and more.

What is the Need and Purpose of Commercial Vehicle Insurance?

Most businesses require commercial vehicles to run the business smoothly. People who are operating a business and are using commercial vehicles for smooth functioning of the business should have their vehicles insured adequately.

Below are some reasons why insurance for commercial vehicle is required for every vehicle used for commercial purpose:

  • If you have a vehicle that you use for your commercial purpose and that vehicle gets damaged in road accidents causing damage to third-party person and property, in that case you would be required to incur the expenses. Here, having a commercial vehicle insurance safeguards you and your business from such liabilities for third-party damages.
  • Also, if you have a commercial vehicle that is smashed in a road collision you can use your commercial vehicle insurance to get compensated for the finances incurred in repairing the vehicle.
  • Further, commercial vehicle insurance protects the hired driver and the family of the driver in case the accident leads to the death or permanent/ temporary disability of the driver.

Inclusions – Things Covered under Commercial Vehicle Insurance policy

The Coverage offered by Commercial vehicle insurance can be modified as per the need of the vehicle owner. If you consider a comprehensive commercial insurance of vehicle, they offer the below coverage:

  • Cover against third-party liability – Here, any damage caused by the insured vehicle to the third-party in an accident causing bodily wound, death or damage of property of the third-party are covered under this insurance policy.
  • Cover against own damage – Also,  the comprehensive commercial insurance covers the insured vehicle against;
  • damages caused due to strike, riot, theft, terrorism etc.
  • damages caused due to natural calamities and disasters like lighting, fire, blast, storm, flood, cyclone, landslide etc.
  • damages caused during transit of the vehicle via rail, road, air, waterways, etc.
  • Cover against personal accident- In case of an accident that leads to the death of the car owner or the hired driver succumbs to injuries or is severely injured and becomes disable, he/she gets covered by a commercial insurance plan. This is an inherent feature of a comprehensive commercial vehicle insurance plan.
  • Towing coverage –  Most comprehensive commercial vehicle insurance plans cover against towing to support disabled vehicles, while some such plans have this feature as add-on policy.

Exclusions – Things Not Covered under Commercial Vehicle Insurance

Below are the covers that are excluded from commercial 3 wheeler insurance:

  • It doesn’t cover damages caused due to nuclear risks or war.
  • Doesn’t cover damages caused due to Ionizing radiation.
  • Doesn’t cover if the accidental damage is caused because of the limits of the geographical area of the vehicle.
  • Also, it doesn’t cover if the vehicle is driven by a person who is not mentioned in the clause of the policy.
  • It doesn’t cover if the vehicle is used for purposes other than that is mentioned in the policy.
  • Also doesn’t cover consequential loss.

Factors that Influence Commercial Vehicle Insurance Premium?

Below are some key factors which influence the premium of the commercial vehicle insurance policy:

  • IDV or Insured declared value of the commercial vehicle
  • How old the vehicle is? or Age of the vehicle
  • Model and make of the commercial vehicle
  • Type of Fuel used
  • Location of Registration
  • Usage purpose of the vehicle
  • Required limit of business liability

How to find the Best Commercial Vehicle Insurance?

It is best to buy commercial vehicle insurance online and while buying the policy, it is essential to compare various policies online on different parameters, such as;

  • Cashless facility
  • Network garages
  • Claim settlement ratio
  • No Claim Bonus etc.

Also, compare commercial vehicle insurance costs before buying a policy so that it suits your business requirement well.

Also Read: How to Get Vehicle Fitness Certificate from RTO

Documents required for Buying Commercial Vehicle Insurance

It is best to buy commercial vehicle insurance online. To procure a commercial vehicle insurance online, you need the following documents:

  • Vehicle RC, Engine and Chassis number
  • Date of the manufacture of the vehicle
  • Date and place where the vehicle was purchased
  • Copy of Registration book
  • Name and address of vehicle owner

Also, buying a commercial vehicle insurance online allows the insured to get online commercial vehicle insurance renewal, whereby you can renew the policy online by following some simple steps.

Apr 06, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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