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Introduction to Commercial Vehicle Insurance

Did you know that India is known for being one of the world's busiest countries when it comes to road traffic? Nearly millions of new car registrations are recorded every year. Indian roads bear a significant burden on the country's transportation, carrying almost 90% of passenger traffic and around 65% of goods. The rise in automobile usage has made road safety a top priority for citizens across the country.

Around thousands of fatalities are recorded in a year involving accidents from all types of vehicles, including commercial ones. The damages caused to commercial vehicles due to unforeseen circumstances can affect the business and can cause significant financial loss. However, one can protect their business from such losses by getting commercial vehicle insurance.

What is Commercial Vehicle Insurance?

Commercial vehicle insurance is a type of insurance plan that protects businesses that use vehicles for their operations. It protects you financially against losses caused by accidents, theft, or damage to your commercial vehicles by insuring vehicles such as pickup vans, passenger vans, trucks, taxis, auto rickshaws, miscellaneous vehicles, buses, school buses, etc.

Insurance covers damages to both the commercial vehicle and its drivers, including injuries and even fatalities. It also protects businesses against liabilities that may arise from accidents or damages to third-party properties, injuries, or accidents.

Why is Commercial Vehicle Insurance important?

Commercial vehicle insurance is necessary for businesses that own and operate vehicles for work-related purposes. Here are some reasons why commercial vehicle insurance is essential.

Legal Compliance

Commercial vehicles must have insurance coverage. Failure to comply with these requirements may result in heavy fines or legal penalties.

Financial Assurance

Commercial vehicle insurance offers financial security against potential losses caused by accidents, theft, or damage to the vehicle. This can help businesses avoid unexpected expenses and prevent major financial losses.

Liability Coverage

Commercial vehicle insurance also covers liabilities arising from accidents, injuries to drivers, passengers, or third parties, and other risks. This can protect businesses from litigation or disputes that may arise from accidents involving their commercial vehicles.

Peace of mind

Businesses can have peace of mind knowing they are covered against unanticipated occurrences that could financially impact their operations by having commercial vehicle insurance.

What are the Types of Plans under Commercial Vehicle Insurance?

Explore our comprehensive range of commercial vehicle insurance plans, designed to safeguard your vehicle with customized protection made simple.

Third-Party Commercial Vehicle Insurance

Third-Party policy covers the damages to third-party properties or injuries or death of other persons involved in an accident with the insured. As per Indian laws, having at least third-party insurance to drive a vehicle in India is mandatory. Third-party insurance is recommended to vehicle owners if the car is very old and has a low IDV compared to the premium being paid or if it's driven very less.

Comprehensive Commercial Vehicle Coverage

It covers both third-party damages and own vehicle damages in case of any accident, theft or fire. Buying a comprehensive policy for your commercial vehicle is not mandatory, but it's always advisable to opt for it because of the limited coverage provided in third-party-only policies. A comprehensive policy will cover the insured vehicle against any partial or total damage due to any accident or external means, such as riots or natural calamities. Hence, it is advisable to buy a comprehensive package policy.

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What are the Types of Commercial Vehicles Covered?

Passenger carrying vehicle insurance

This type of policy covers vehicles that carry passengers such as commercial cars/taxis/cabs, auto rickshaws, and school or tourist buses. Passenger-carrying vehicles have huge liabilities for the lives of their passengers and hence always need protection against any liabilities arising out of any unfortunate incident.

Goods-carrying vehicle insurance

Goods-carrying vehicles are used for transporting public or private goods from one place to another such as trucks, trailers, tippers, pickup, and/or delivery vans, and goods-carrying three-wheelers come in this category. Goods-carrying vehicles perform heavy-duty tasks and have very high chances of damages to or from insured vehicles hence commercial vehicle policy is a must-have to protect all parties in any unfortunate incident.

Miscellaneous & Special Vehicles Insurance

Miscellaneous vehicle insurance policies provide coverage against the damages caused to or by miscellaneous vehicles such as tractors, JCBs, cranes, and other special types of vehicles. Miscellaneous vehicles are vehicles that are not used for transporting goods or carrying passengers but for other works such as construction or in emergency services such as ambulance or fire-suppressing vehicles.

Risks Included

Commercial vehicle insurance policies cover a wide range of risks associated with operating vehicles for business purposes. These typically include:

Accident Coverage

Provides coverage against the damages to or by a commercial vehicle in case of an accident.

Loss of Vehicle

If stolen, this policy ensures coverage for the loss of the vehicle if it cannot be tracked.

Third Party Coverage

An injury or deaths of third parties are covered.

Fire Coverage

Losses or damages caused to commercial vehicles in case of fire are covered.

Loss Due To Natural Disaster

Covered losses due to natural disasters such as floods, lightning, and storms that can cause considerable damage to vehicles.

Damage in Case Towing

Any damages to or by the vehicle while being towed.

Risks Excluded

Some common exclusions include:

General Risks

General wear and tear

Vehicle Breakdown

Mechanical or electrical breakdown of the vehicle

Depreciation

Usual depreciation of the value

Losses

Non-accidental losses

Drink & Drive

Any losses occurred while drunk driving the vehicle

Uncertain Damage

Any loss or damage to the vehicle due to war, invasion, nuclear warfare, etc.

Damage Outside Geographical Region

Any loss or damage caused outside the geographical area of coverage as mentioned in the policy

Unauthorized Driving

Driving without an appropriate driving license.

Illegal Activities

Any loss that occurred to the commercial vehicle while using it for racing or any illegal purposes

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