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Commercial Vehicle Insurance

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Commercial Vehicle Insurance

Commercial Vehicle Insurance

According to the report published by The Ministry of Road Transport and Highways in 2019, 449,002 accidents were reported in 2019 across the country. Out of the total number of accidents, 1,51,113 deaths were reported. With a little more maths, this comes to close to 1230 accidents and 414 accident-related deaths per day. 

These accidents involve all types of vehicles including commercial ones. The damages caused to the commercial vehicle in case of an accident or any unforeseen situation can directly affect the business and cause humongous financial losses. However, this cost can be reduced with the help of commercial car insurance. 

Let’s take a walk through the meaning of commercial vehicle insurance, its advantages and various other nuances.

What is Commercial Vehicle Insurance?

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Meaning of Commercial Vehicle Insurance

It is a vehicle used for transporting goods or carrying passengers. Vehicle insurance that offers a financial backup to a commercial vehicle in case of an unfortunate incident is called Commercial Vehicle Insurance. It is similar to vehicle insurance for private vehicles. However, the related coverage is specific to serve the needs of a commercial vehicle and the contingencies that may occur to such vehicles.

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How to Buy Commercial Vehicle Insurance

You can buy commercial vehicle insurance online or offline. Nowadays, buying insurance for commercial vehicles online is more convenient and time-saving. If you buy from insurance companies such as ACKO, buying insurance can also be lighter in your pocket.

Why is commercial vehicle insurance important?

Having the right insurance for commercial vehicles could help you repair the vehicle in case of accidental damage. You may need a commercial motor vehicle insurance policy if you.

  • Transport people or goods for a fee in your vehicle.

  • If you own one or more commercial vehicles since it protects you financially and covers your business from any losses caused by accidental damages to your vehicle.

  • It is mandatory to have at least Third-party Insurance Policy as per The Motor Vehicles Act, 1988. Failure to insure your commercial vehicle can invite penalties.

Key Features & Benefits of Buying Commercial Car Insurance Online

Buying vehicle insurance becomes easier when you choose the online platform since it helps compare prices and services before you make the decision. It helps the potential buyer to adjust certain factors that affect the cost of insurance for commercial vehicles and know the approximate amount in advance. Commercial car insurance provides a financial backup in case of losses caused due to the damaged commercial vehicle. Here are the key features & benefits of buying insurance for your commercial vehicle.

Compliance with the Law

Buying a third-party commercial car insurance plan is mandatory by law in India for commercial vehicles. Failing to buy mandatory commercial vehicle insurance can invite serious penance. This is because the risk involved in driving a commercial vehicle, especially passenger-carrying vehicles like taxis, travel vehicles, etc. is extremely high.

Coverage Against Third-party Losses

The damage or injury caused to the third party due to a commercial vehicle can be of a higher magnitude. This attracts equal amounts of compensation that can prove to be a major financial loss for you. It can adversely affect the business as well. However, insurance provides a safety net against financial losses where third-party damage or injuries are concerned.

Coverage Against Own Damage

A commercial vehicle is one of the assets that help the vehicle owner keep the business running. Any kind of damages caused to this asset can have a negative impact on the business. In such a situation paying more money for the repair of the vehicle can be even more financially draining. Commercial insurance can help you safeguard your savings/income by paying for the repairs of the damaged vehicle.

Peace of Mind

Commercial Vehicle Insurance ensures that you remain stress-free and can continue to focus on the business. Buying insurance for your commercial car can bring relief to you in terms of damages to the insured vehicle and/or third-party damages or injuries.

Different types of Commercial Vehicle Insurance Plans

Liability Only Policy: Passenger Carrying Vehicle

This commercial vehicle insurance policy offers financial shield against third-party liabilities for passenger-carrying commercial vehicles. It is mandatory to insure your passenger-carrying commercial vehicles with this plan as per The Motor Vehicles Act. The policy provides coverage against death or bodily injury to a third party and damages to their property or vehicle.

Liability Only Policy: Goods Carrying Vehicle

As the name suggests, this commercial vehicle insurance policy offers financial protection against third-party liabilities for goods-carrying commercial vehicles. As per law, you must insure your vehicle with this mandatory motor insurance plan to avoid penalties. It provides financial protection against third-party liabilities that include death or bodily injury to a third party and damages to their property or vehicle.

Liability Only Policy: Miscellaneous and Special Type of Vehicles

This commercial vehicle insurance plan is designed for special and miscellaneous types of commercial vehicles. It offers financial protection against third-party liabilities. It is also mandatory as per The Motor Vehicles Act. Like the above two plans, it provides financial protection against death or bodily injury to a third party or damages to their property or vehicle.

Note: The above types of Commercial Vehicle Insurance Plans are subject to availability

What is Third-party Commercial Car Insurance?

Buying at least a Third-party insurance policy is mandatory in India. It covers any person that is directly or indirectly affected by the insured vehicle. Third-party vehicle insurance provides the following coverages.

1. Accidental third-party property damage

2. Accidental third-party bodily injuries

3. Death of the third party

What is a Comprehensive Commercial Car Insurance?

The Comprehensive type of vehicle insurance is exhaustive in nature. It not only provides mandatory coverage but also covers the insured vehicle against damages such as fire, riots, accidents, etc. Take a look at the following to understand the coverage in detail.

1. The entire coverage offered by the Third-party liability policy.

2. Coverage against theft of the insured vehicle.

3. Cover for damage against natural calamities (floods, earthquakes) and man-made calamities (riots, vandalism, bandhs).

4. Accidental damage while driving a car.

5. Coverage for damages against fire or explosion.

Inclusions: What is Covered in Commercial Car Insurance Policy?

This section lists the inclusions of a commercial car insurance policy. Inclusions are situations that are covered under an insurance policy. You can go ahead and raise a claim against the following situations.

1. Damages arising out of a malicious act not caused by the owner.

2. Damage due to fire, explosion, or if lightning strikes the insured vehicle.

3. The entire coverage offered by the Third-party car insurance policy.

4. Damage to the insured vehicle caused due to an accident.

5. Damage to the insured vehicle caused due to terrorist activity.

6. Damage due to man-made calamities like bandh, riots, vandalism, etc.

7. The damage occurred while the insured vehicle was being transported via water, rail, or land.

8. Damage resulting from natural calamities like earthquake, floods, hurricane, cyclone,  landslide, hailstorm, frost, etc. Damage such as shock damage or fire damage due to a natural calamity is also covered.

9. Theft of the insured vehicle (burglary/breaking into a house is included in this coverage). Here, the owner is expected to submit the vehicle keys and the necessary documents.

Note: Personal Accident cover for the owner/driver is mandatory in India and needs to be bought separately along with the Third-party or Comprehensive commercial vehicle insurance policy. It covers both permanent disability/death while driving a car and the coverage will be maximum Rs. 15 lakhs during one policy period. 

Exclusions: What is Not Covered in Commercial Car Insurance Policy?

Exclusions are situations that are not covered under an insurance policy. Meaning, you cannot raise a claim if the insured vehicle is damaged due to the following situations.

1. Damage due to electrical or mechanical breakdown.

2. Consequential losses are not covered.

3. Damage caused when driving under the influence of alcohol.

4. Damage caused when driving without valid documents.

5. Damage caused when involved in criminal activity or breaking the law.

6. Intentional damage to the insured vehicle.

Third-party Commercial Vehicle Insurance vs Comprehensive Commercial Vehicle Insurance

The primary difference between Third-party and Comprehensive Commercial Vehicle Insurance is the kind of coverage it offers. While the Third-party Insurance Policy only provides you financial protection against third-party losses, the Comprehensive Insurance Policy covers third-party losses and offers financial protection against damages or losses to the insured vehicle.

Opting for the right type of insurance is vital since it is not only mandatory as per law, it also avoids traffic penalties and even disqualification of your driving licence. Here is a comparison between Third-party Commercial Vehicle Insurance vs Comprehensive Commercial Vehicle Insurance.

Third-party Commercial Vehicle Insurance Comprehensive Commercial Vehicle Insurance
Low premiums Offers a wide range of coverage options
Coverage only for third party claims Coverage for accidental damages to a third party and own damage
Coverage for the third party injury and accidental death Coverage for more than just accidental damages (options to include add-on covers)
Coverage for third party property damage caused by the insured person Coverage for accidental damages due to natural or man-made calamities
No coverage in case of accidental damages to the insured vehicle due to fire or theft  Coverage for losses due to fire, total loss, and theft
No option to include add-on covers Option to include valuable add-on covers

To protect you from third-party losses and damages/losses to the insured commercial vehicle caused due to an accident, floods, theft, riots, etc., it is crucial that you choose the Comprehensive Insurance Plan for wide-ranging benefits. It also lets you include add-on covers for robust insurance coverage.

A detailed list of exclusions will be available in the commercial car insurance policy. If you are unsure about the list, you can get in touch with our support team.

What is Commercial Car/Taxi Insurance?

Meaning

The insurance bought for the purpose of covering a commercial car/taxi is known as commercial car/taxi insurance. These vehicles are usually four-wheelers that can be either simple hatchback cars, sedans, or SUVs (Sports Utility Vehicles). They are commercially owned and are used to carry paid passengers from one place to another.

Importance

Any major damage caused to the commercial car can directly put the lives of its passengers at risk. Hence, it is imperative that the owner of a commercial vehicle car spend enough time purchasing a comprehensive insurance policy with extensive coverage. The insurance policy covers a commercial car/taxi against the types of damages that are mentioned above.

Commercial Car Insurance Price

The price of commercial car insurance depends on a number of factors. The owner can use an online commercial car insurance calculator to know the approximate price of insurance for commercial vehicles. Usually, the following factors play a vital role in determining the cost of a car insurance policy.

Type of Insurance Policy

The premium for Third-party policy is lower than the Comprehensive Policy. Usually, the wider the coverage, the higher the policy.

Deductibles

Deductibles are of two types - Mandatory deductibles and Voluntary deductibles. The higher the deductible amount at the time of claim settlement, the lesser the premium amount.

Insured Declared Value (IDV)

IDV is the approximate current market value of the car. The higher the IDV, the higher the premium amount and vice versa.

Claim History

Insurers award you for not raising any car insurance claims during the policy period. This discount can go upto 50% for five consecutive claim-free years. The higher the No Claim Bonus discount, the lower the premium.

Make and Model of the Car

The make and model of the car and the year of manufacture of the commercial car also determine the premium amount of your commercial vehicle.

Engine Capacity

Third-party insurance policy rates are determined by the IRDAI based on the vehicle’s engine cubic capacity (cc). The higher the cc, the more the premium amount.

How to calculate commercial vehicle insurance premium?

Calculating the approximate insurance cost for commercial vehicles can be done via the commercial car insurance premium calculator. It is an online tool to find out the insurance premium for commercial vehicles. Here is the process to calculate the insurance rate for commercial vehicles.

  • Share details: Provide a few details of the vehicle, such as vehicle model, purchase date, and previous policy.

  • Customise features: Choose the type of insurance plan, customise the plan with required add-on covers.

  • Find out the premium: Once you have selected the type of plan and customise the plan with add-ons, click on calculate to find the insurance cost for the commercial vehicle.

You can also buy commercial car insurance online for a brand new vehicle at ACKO. Simply provide your personal and vehicle details, and our support team will customise a quote for your vehicle. You can then review and purchase the plan online.

Process to renew commercial vehicle insurance plan

The process for online commercial vehicle insurance renewal at ACKO is a hassle-free experience without any paperwork. Here are the steps for commercial car insurance renewal.

For existing ACKO customers:

  • Step 1: Log in to your ACKO account through our website or mobile app.

  • Step 2: Select the policy for your commercial vehicle and click on ‘Renew’.

  • Step 3: Pay the premium and receive the policy document through email.

For new customers:

  • Step 1: Visit our website/mobile app.

  • Step 2: Provide a few details of your commercial vehicle and previous policy (if available).

  • Step 3: Select the plan, pay the premium and get your policy document instantly through email.

Things to Consider While Buying/Renewing Commercial Vehicle Insurance

Here is the list of factors to consider before buying insurance for your commercial car.

1. Consider your requirements and compare available plans.

2. Check the quality of services offered by the insurance company.

3. Check the claim settlement ratio of the insurer.

4. Check the coverage, inclusions, exclusions, terms and conditions.

5. Use an insurance premium calculator to buy a policy that is high on benefits, but low on costs.

Step-by-Step Process to Buy a Commercial Vehicle Insurance Online

Here is a step-by-step process to buy insurance coverage for commercial vehicles online on ACKO.

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Step 1

Consider your requirements before buying a commercial vehicle insurance policy. Once done, visit www.acko.com or download the mobile app to purchase a policy.

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Step 2

Select ‘Commercial Use’ when prompted the purpose of driving your car. Answer a few details such as your location, your car’s make and model, variant, purchase year, previous policy details, etc.

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Step 3

Compare plans to gauge the scope of coverage, inclusions, exclusions and the price of the insurance plan before buying the policy.

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Step 4

You can also adjust the IDV to check its impact on the premium amount. Review coverage, and go through the terms and conditions of the policy.

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Step 5

Make a payment and get the policy instantly into your inbox! No paperwork or form-filling required!

Why is it Important to Renew Commercial Vehicle Insurance Policy?

It is crucial to renew the vehicle insurance policy before the expiry to ensure continued coverage. It will help in complying with the law as well.

For commercial car insurance renewal, all you have to do is log in to your account, choose the policy, make the payment and that’s it. Your commercial vehicle is now insured!

How to Claim Commercial Car Insurance?

To raise a claim against commercial car insurance, you need to first get in touch with your insurance company, which in this case is ACKO.

Each insurer has slight variations when it comes to their claim process.  To raise a claim, you can get in touch with us via call, email, or by raising a claim on our website/mobile app.

Commercial Vehicle Insurance Claim Process

A claim for commercial car insurance can be of the following two types - Cashless Claim or Reimbursement Claim.

Cashless Claim

The vehicle is repaired at a network garage under a cashless claim. In this case, the network garage and ACKO will settle the repair bill among themselves and you just need to pay the deductibles. This is a hassle-free claim process where you do not have to worry about arranging a large sum of money for getting the vehicle repaired.

Reimbursement Claim

A reimbursement claim can be raised after you settle the repair bills with a garage of your choice. Here, you will first pay the entire repair amount to the garage and then apply for a reimbursement claim. In this case, it requires you to arrange money for the repairs of the damaged vehicle.

Documents Required to Claim Commercial Vehicle Insurance

You might require the following set of documents while making a claim with the insurance company.

1. The commercial insurance policy

2. Duly filled claim form

3. Fitness certificate of the vehicle

4. Driving license of the driver of the vehicle

5. Registration certificate of the vehicle

6. First Information Report (FIR) wherever required

Why Choose a Commercial Vehicle Insurance Policy by ACKO?

The following are the advantages of buying insurance for commercial vehicles at ACKO.

Best Price

Being a digital-first insurance company has allowed ACKO to eliminate costs and commissions related to middlemen or agents. This benefit is directly passed on to you while buying insurance.

Instant Claims

Raising a claim is easy with ACKO. Just login to your account and raise claims anytime and from anywhere. With this, our efficient claim settlement team ensures that your claim settlement journey is smooth, quick and hassle-free.

Excellent Customer Support

Any queries related to buying a policy, choosing an insurance cover, or making a claim, will be addressed by an insurance expert who will provide the best possible solution all along the way.

Types of Commercial Vehicles Covered

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Passenger Carrying Vehicles

Passenger Carrying Vehicles (PCV) are usually Light Commercial Vehicles, for example, auto-rickshaw, car, cab, taxi, school bus, etc. However, heavy vehicles like buses or coaches also come under PCV.

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Goods Carrying Vehicles

Goods carrying vehicles can be of any type from Heavy Commercial Vehicles (HCVs), Medium Commercial Vehicles (MCVs), or Light Commercial Vehicles (LCVs). Mostly, many goods are carried in vehicles like trucks, tempos, or lorries.

Commercial vehicle insurance cancellation

While it is sad to see you go, our cancellation process is hassle-free. If your policy has not commenced (prior to the policy start date), you get a full refund of your premium. However, if your policy has begun, you can still cancel the plan considering the following circumstances.

  • Selling the vehicle

  • Purchased a new policy

Here are different situations and how the refund will be processed.

  1. If the policy has already commenced, the refund will be on a pro-rata basis.

  2. If the policy has not commenced, a full refund will be processed.

  3. If the policy has commenced and the cancellation is under misrepresentation, a full refund will be processed.

Process to cancel commercial vehicle insurance

Write to us at [email protected] to cancel the insurance for your commercial vehicle. Ensure you mention the reason for cancellation, the policy number and the required documents. 

If you are cancelling the insurance due to the transfer/sale of the vehicle, you need to provide the required legal documents (Form 29 of RTO or the Sale Deed) as proof of transfer/sale. If you have bought a new insurance policy, you have to provide a copy of the new policy document.

Frequently Asked Questions About Commercial Vehicle Insurance

Generic FAQs

What is commercial insurance?

A car insurance policy that protects a commercial car against financial liabilities is called commercial car insurance. It can be one of the following two types – Third-party liability insurance or Comprehensive insurance.

What is the difference between commercial and personal insurance?

Commercial insurance provides insurance coverage to commercial vehicles that transport goods or passengers. On the other hand, a personal insurance policy is issued to private vehicles that a person owns for personal travel purposes.

Why would I need insurance for commercial vehicles?

Commercial vehicle insurance provides coverage against various contingencies like damage to the third-party property or damage to the insured vehicle, etc. It can help the vehicle owner to carry out quick repairs and help the business run. Also, it is mandatory by law to buy a Third-party insurance policy while driving your vehicle in India.

How do you insure a commercial vehicle?

One can insure a commercial vehicle either by visiting ACKO’s website or downloading the app. The entire process can be completed in under 5 minutes if all goes well. 

How are insurance premiums calculated for a commercial vehicle?

The insurance premium is calculated based on various factors like IDV of the vehicle, claim history of the vehicle owner, manufacturing year, make and model, etc.

What is IDV in my Commercial Vehicle Insurance policy?

IDV refers to the Insured Declared Value. It is the approximate current market value of the vehicle. The car owner needs to declare this amount while buying a comprehensive insurance policy. IDV is also an important factor in determining the cost of insurance for commercial vehicles.

Is it possible to pay commercial vehicle insurance on EMI?

No, you cannot pay the premiums for commercial vehicle insurance on Equated Monthly Instalment (EMI). As per Section 63VB of The Insurance Act, 1938, insurers will not assume any risk unless the commercial vehicle insurance premium is received in advance. Therefore, there is no car insurance EMI option.

CIN: U66000KA2016PLC138288

IRDAI Registration No: 157

Category: Non-Life Insurance

The use of images and brands are only for the purpose of indication and illustration. ACKO claims no rights on the IP rights of any third parties. The ratings are derived from reviews and feedback received from Google and Facebook users on their respective platforms. | *Savings of upto Rs. 50,000 have been calculated on the IDV of Rs. 18,00,000 and 0% NCB. Amount saved is in comparison to tariff rates. Product name: Private Car Policy - Bundled | UIN: IRDAN157RP0014V01201819 |

Trade logo displayed above belongs to ACKO Technology & Services Pvt Ltd and used by ACKO General insurance Limited under License. For more details on risk factors, terms, conditions and exclusions, please read the policy wordings carefully before concluding a sale.