Commercial Vehicle Insurance

A commercial Vehicle Insurance policy provides coverage for damages and losses caused to or by a commercial vehicle and the respective owner-driver. Damages and losses can be in the form of accidents, collisions, natural calamities, fires, etc. it is essential for all businesses to buy a commercial vehicle insurance for their vehicles , such as for auto-rickshaw, schoo-buses, tractors, commercial vans and trucks.

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Why do you need a Commercial Vehicle Insurance ?

1. If your business is of such type for which you need to own one or many vehicles, it is essential to get a commercial vehicle insurance that will not only financially protect your vehicle but will also cover your business from any losses and damages caused to and by your vehicle (s) and the people using it.

2. If there is involvement of vehicles in your primary business, such as private school bus, a commercial vehicle insurance policy will provide assurance to your stakeholders and passengers that they will always be protected and covered for.

3. As per laws of India, it is mandatory to at least have a liability only policy in place that provides protection to third parties against damages or losses that could be caused by your commercial vehicle.

Inclusions

Commercial Vehicle Insurance provide coverage against

Accidents

Damages caused to a commercial vehicle in case of an accident.

Theft

Damage or loss caused to the commercial vehicle due to theft.

Fire

Damages caused to the commercial vehicle due to fire.

Natural Disasters

Damages caused to the commercial vehicle due to any natural calamity.

Personal Accident

If there is an accident of the commercial vehicle, leading to an injury or death of the driver.

Third Party Losses

Any damages caused by the commercial vehicle to a third party.

Towing Disabled Vehicles

Any damages caused to by the commercial vehicle to the vehicle being towed.

Commercial Vehicle Insurance Add-ons

Consumable Cover

A complete protection is assured by taking consumable cover for commercial vehicle insurance. A consumable add-on covers the cost of your commercial vehicle’s nitty-gritties such as nuts and bolts, screws, engine oils and grease in case of an accident.

Part-Depreciation Protect

As a result of wear and tear, the commercial vehicle and its parts generally depreciate in value over time and this amount gets deducted from any claim. This add-on ensures that the deprecation is covered over any replaced part of commercial vehicle (like rubber or fiberglass parts) in case of an accident .

Gear-Box and Engine protect

Water-regression or leakage of lubricating oil as a result of an accident, usually damages your vehicle. This add-on help covers any consequential damages caused after the accident (but because of it). For eg. Engine damage due to hydrostatic loss, which is not covered in a standard policy.

Breakdown Assistance/ Roadside assistance

Breakdown of your vehicle on the road as a result of an accident, flat tyres, malfunctioning of batteries or more, this add-on will provide you the assistance 24*7.

Loss of revenue

This add-on will compensate you for the loss of revenue that could occur while your commercial vehicle is not available when it is getting repaired due to damages.

Additional towing expenses

This add-on will provide coverage for additional expenses that you might have to pay when your vehicle is being moved from the spot of accident to the nearby garage or any other safe place

Additional Coverages

Standard Exclusions of Two-wheeler Insurance Policy

Personal Accident Cover

PA cover also known as Personal Accident cover is now mandatory by the laws in india. In case you don’t already have a PA cover separately, you can include it within your commercial insurance policy plan in the form of this add-on. This add-on provide coverage for bodily injury or death of the owner-driver in case of an accident.

Unnamed PA Cover/ Passenger Cover

This plan is a fallback to cover if something happens to the person sitting with you in the vehicle, in an unforeseen accident. Unnamed passengers under this add-on means your family members or friends traveling along with you at the time of an accident.

Legal Liability

This cover provide protection against any legal liability that arises against you due to an injury caused to your employees/ someone who works for you.

IMT 23

IMT 23 is for commercial vehicles. As a result of long-distances travelled and wear-and-tear a commercial vehicle faces in comparison to a private vehicle, coverage for lamps, tubes, tyres and bumpers is generally excluded from the normal insurance policies. However, in case you opt for IMT 23, such exclusions as mentioned-above will come down to 50%. Moreover, if depreciation cover is taken, no depreciation will be deducted in case of partial loss claims i.e. reimbursement of the entire claim amount except for policy excess and salvage.thus, it is often suggested that it is better to take IMT 23 too in case you opting for depreciation cover which will eventually make your cover more comprehensive.

Electrical Accessories

In case you have fitted any electrical accessory in the vehicle, which is not considered a part of the original model, then this will provide coverage for those accessories.

Non-Electrical Accessories

In case you have fitted any non-electrical accessory in your vehicle which is not a part of the original/manufacturer's model, this add-on provides coverage for those accessories during damages/losses caused by an accident.

Exclusions and compulsory deductibles

There is a certain amount you will have to pay upon every loss as your share of loss which is generally called compulsory deductible. As a result of this ,your premium is also reduced. Moreover, this will also cover the loss or damage to lamps, tyres, tubes, mudguards, bonnet etc in case your vehicle is completely damaged.

What’s Not Covered

Standard Exclusions of Commercial Insurance Policy

Own Damages for Third-Party Policy holder

In the case of a Third-Party or Liability Only two-wheeler policy, damages to own vehicle won’t be covered.

Drunk Driving or without a Licence

Your commercial insurance will not provide coverage for you where the owner driver was riding drunk or without a valid two-wheeler licence.

Contributory Negligences

Any contributory negligence (e.g. damage due to driving a commercial vehicle in a flood, which is not recommended as per the manufacturer’s driving manual, will not be covered)

Consequential Damages

Damages which are not direct result of the accident/natural calamity i.e. consequential damages such as loss of earnings, loss of market etc. are not covered.

Types of commercial vehicle coverage

Passenger Carrying Vehicle Insurance

It refers to the insurance of the vehicle that are being used by people also called passenger for transportation purposes. Auto rickshaw, school buses, private buses, etc are referred to as passenger carrying vehicles.
A huge responsibilities is involved with the passenger carrying vehicles especially school buses and regular cabs as they have to carry several passengers on a daily basis.
Income and livelihood of vast section of Indian's population depends upon driving these vehicles. Therefore, commercial vehicle insurance always assures protection to these drivers against any losses, in the case of any disastrous or unfortunate circumstances.

Goods Carrying Vehicle

Goods carrying vehicles are generally those vehicles that carry goods to be transported from one place to another. Eg. trucks, tempos and lorries etc.
Goods carrying vehicles tend to be large in size and are thus prone to risk. A commercial vehicle insurance not only provide protection from damages and losses to third parties but also protects the owner of the vehicle and the vehicle itself from the damages or losses that can occur due to accidents, natural calamities etc.
A commercial vehicle Insurance provide protection from losses against any loss or damage of goods that can occur due to circumstances such as natural calamities, accidents, fires etc. Therefore it turns out to be a savior for those businesses who actively uses trucks to transport goods from one place to another.

Miscellaneous & Special Vehicles Insurance

Many vehicles, apart from cabs, trucks and buses are used for and by business. Many of these include special vehicles used for farming, mining and construction, among others.
The commercial vehicle Insurance for such miscellaneous and special vehicles will provide protection to the insured vehicles from any damages and losses caused to and by the vehicle and its owner who is also the driver.
Considering both investment and gigantic size of these vehicles, it's always better to insure the same with a commercial vehicle insurance. In this way, the business or sole proprietor will reduce its risk and protect itself from any financial losses caused due to unfortunate situations.

How to file a claim?

Call us at 9310540557 or drop us an email at customercare@rohinicls.co.in

Also, keep your details such as policy number, location of the accident , date and time of the accident, and contact number ready to make the process easier.

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FAQ about Commercial vehicle Insurance

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What is a Passenger Carrying Vehicle?

It refers to the vehicles that are being used by people also called passenger for transportation purposes. Auto rickshaw, school buses, private buses, etc are referred to as passenger carrying vehicles.

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

A third-party insurance policy in a commercial vehicle insurance provide coverage for damages and losses caused to a third-party property, person or vehicle by the insured’s vehicle , whereas a comprehensive policy will provide coverage for both third-party as well as own damages and losses.

What is a Goods carrying vehicle?

A Goods carrying vehicle, under the category of commercial vehicle are those vehicles which are primarily used to transport goods from one place to another such as trucks, lorries etc

What is considered as miscellaneous and special vehicle category?

Vehicles that doesn’t lie in the category of either passenger carrying vehicles or goods carrying vehicles are referred to as special or miscellaneous vehicles. Eg. Tractor, pick-up trucks, vehicles used during construction etc.

How is the IDV and premium of commercial vehicle insurance inter-connected?

IDV (Insured Declared Value) is the mark upto which commercial vehicle is usually insured. IDV actually, is the vehicle’s ex-showroom price, minus depreciation. However, if the vehicle gets stolen or damaged beyond repairs, the insurance company will provide the Insured Declared Value (IDV) of the vehicle to the insured. However it is pertinent to note that the IDV of the vehicle reduces considerably after depreciation. For eg. after 5 years, the value of your vehicle would have been reduced by 50% due to depreciation.

Thus, in case , if you wish to get rid of depreciation, you can opt for the Return To Invoice (RTI) add-on. This would provide assurance that your vehicle is insured upto its current listing price / on-road price in case of theft or damage that results in total loss of the vehicle.

What type of risks are covered under a third party policy?

Following risk are covered under a third party policy:

Death or injury to a third party
Damage caused to the third party party policy.

In a third party insurance policy the first party is called the “Insured”and the second party is called the “Insurance Company”. The third party here refers to any third person. Under third party insurance, a third party can lodge a claim for compensation for injury, death, or property damage caused by your car. The case for claiming compensation under a third party insurance shall be lodged against you and your insurer. Also it is important to note that although there is no limit on the liability covered for injury or death, the cover for the third party property (generally the third party’s car) damage is capped at Rs. 7.5 Lakh. In cases where you are the third party and gets hit by another’s car then you can claim damages from the other party. In cases where you are injured you can claim medical expenses, compensation for physical disfigurement and also for loss of earnings in cases where you are not in a condition to work after accident. In the cases of death, the dependents of the deceased can also claim compensation on the basis of income lost of the deceased. Medical expenses needed for the treatment of the injury can also be claimed that was the cause of death. In cases of property damage, surveyors report, original’s bills from an authorised garage and motor vehicle inspection report are essentially required in order to quantify the loss. If you are successful in your claim for compensation then the approved amount shall be paid (upto the limits in the policy) by the other person’s insurer under his/her third party insurance.

What are the consequences if failed to renew commercial vehicle insurance on time?

In case the person forgets to renew his commercial vehicle insurance on time, then the following can be the consequences:

The insurance company will not pay out claim in case the vehicle has met with an accident during this “uninsured interval”.
No claim bonus will not be paid in case there is a gap of more than 90 days between the previous insurer expiry date and new insurer expiry date.
Driving a vehicle whose insurance policy has expired is illegal and can lead to fines.

What is a No Claim Bonus?

In case you do not make a claim against your insurance policy, then you shall be eligible for a discount in case you renew your plan. Such discounts are referred to as No Claim Bonus or NCB. Such NCB discount also augment for every subsequent claim-free year. Such NCB discounts generally range from 20% to 50%. However, in case you make a claim, this NCB discount will be retracted completely. NCB is usually attached to the policyholder and not to the vehicle. Thus, inc are you buy a new vehicle , your NCB gets transferred to the insurance policy of the new vehicle.

Will my No Claim Bonus gets transferred if i change from one insurer to another?

In case you don’t make any claim in your current policy and wishes to change the insurer or vehicle insurance companies at the time of renewal, then you need not worry about your No Claim Bonus. The No Claim Bonus of you current policy can be transferred to whichever insurance company you wish to opt for. All you required is the proof of No Claim Bonus along with the original policy papers. As a proof, the insured can ask the insurer for a letter that acknowledges the bonus accumulation in their policy.

What do you mean by “Deductible”?

The insured needs to pay some amount from his pocket before the insurer provides compensation for a claim. Such amount paid by the insured from his pocket is referred to as excess or deductible and varies on the kind of vehicle you own. Eg. For two wheelers, the deductible/excess generally starts from Rs.50 and for private cars and commercial vehicles such base deductible is Rs. 500. The deductible/excess amount is directly proportional to the cubic/carrying capacity of the vehicle. This means that the higher the cubic capacity of the vehicle, the higher will be the deductible amount. The deductible can Alstom increase in cases where the vehicle is too old or the frequency of claims made by the insured/policyholder is too high.

How to determine premium in commercial vehicle insurance?

Different insurers have different premium charts keeping in mind various factors related to vehicle. Some of the main criterion that is taken into consideration for determining the premium of a vehicle include the cubic capacity of the vehicle , the deductible/ excess amount of the vehicle, the coverage you have opted for and the Insured Declared Value (IDV) of the vehicle. Some of the motor vehicle insurer charge a lower premium but in turn make you pay a higher deductible, whereas other provide less coverage and less Insured Declared Value.

Which commercial vehicle

There are generally two type of insurance policies in India

Third party vehicle insurance
Comprehensive vehicle insurance

However, having third party vehicle insurance is the minimum benchmark to drive a vehicle in India. This kind of policy only covers damages suffered by the third-party in the case of an accident. In case of a extensive coverage, you can opt for comprehensive vehicle insurance . It covers both ‘third party liability’ as well as ‘own damage’ portion of your vehicle. However there is a price difference between the two, the latter being slightly expensive than the former.

Can a duplicate vehicle insurance policy be acquired if the original is lost?

In case you have lost your original insurance certificate/policy, then you can always ask your insurance provider/insurer for a duplicate copy by either calling at their toll-free number or by sending mail to their official email ID.

In case I buy a new commercial vehicle in one particular city and then move to another city, will that affect the premium rate of my insurance policy?

The premium of a commercial vehicle insurance policy generally varies accordingly to the place where your vehicle has been registered. Thus, in case you move from one city to another, it shall effect your commercial vehicle policy premium. For instance, Zone-A premiums are applicable to vehicles registered in larger cities, whereas Zone-B premiums are applicable to vehicles registered in smaller towns.

What is the period of a commercial motor insurance policy?

In India, the validity of a commercial vehicle motor insurance policy is for one year and can be renewed before the due date. The insured/policyholder needs to make payment of premium on time and should not let the policy lapse. Otherwise, the insurance companies/insurer needs to perform a complete vehicle inspection, in case the insurance policy lapses even for a day. Also No Claim Bonus will be lost if your comprehensive insurance policy lapses even for more than 90 days.

What are the different coverage limits an insured can avail?

The sum insured of your commercial vehicle insurance policy is limited and cannot exceed the IDV of your vehicle . Thus the maximum compensation that can be given in case of theft or total loss of the vehicle cannot exceed the IDV of the vehicle. IDV (Insured Declared Value) is actually the current market value of your vehicle after deducting depreciation. However for a third party/ liability only plan, the compensation is capped at Rs. 7,50,000 for property damage. But in case you plan include Personal Accident (P.A) cover, then you and/or your family member can be given compensation of up to Rs. 15 lakh in case of disability or death caused due to an accident.

Is GST applicable on commercial vehicle insurance ?

Yes GST is applicable on commercial vehicle insurance i.e 18%

I changed my residential address. How do I update the new address in the policy documents?

The insured/policyholder needs to inform the insurer/insurance company regarding such address change to be made in the insurance policy. This can be done by submitting the proof of the details changed to the insurance company. Once those proof are verified, the insurance company will do the needful to make those requisite changes. However, some insurance company may ask for additional insurance premium for updating the policy.

In cases where changes are needed to be made in the information provided in the policy such as change of address or changes to the vehicle or its use , a formal endorsement is required for this. For this, the policyholder is required to submit a letter along with the proof of changes. Some endorsement are only made by the payment of an additional premium to the insurer. Therefore, it is essential to check the terms and conditions related to endorsement mentioned in your commercial vehicle insurance policy before any commitments are made.

Which documents to be carried while driving commercial vehicle on the road?

The following documents need to be carried by the driver in order to avoid fines/challans:

Insurance certificate
Photocopy of the vehicle registration certificate
Pollution under control record
Photocopy of the driver’s driving license

Is it possible to transfer the insurance policy during the sale of my commercial vehicle?

Yes, motor insurance policy can be transferred to the transferee during the sale of the vehicle. However, for such transfer you have to intimate the insurer/insurance company in writing. The insurer will then share the fresh proposal form which you have to fill and some amount will also be charged in order to carry out such transfer process. However, the transfer of policy should take place within 14 days of the transfer of vehicle registration, otherwise you will not be able to file any claims.