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What is Commercial Vehicle Insurance?
Commercial vehicle insurance is a type of Vehicle insurance policy that provides financial protection for vehicles used for business or commercial purposes. This includes trucks, taxis, auto-rickshaws, buses, delivery vans, and other vehicles used to transport goods or passengers for profit.
Types of Coverage in Commercial Vehicle Insurance
Third Party
Covers legal liabilities arising from injury, death, or property damage caused to a third party by the insured commercial vehicle. This is mandatory under Indian law.
Own Damage
Protects your commercial vehicle against damages due to accidents, fire, theft, vandalism, natural disasters, and man-made events. This is optional but recommended for better protection.
Comprehensive
A combination of third-party liability and own damage cover. It offers complete protection for the insured vehicle as well as liabilities toward third parties, making it ideal for business use.
Why is Commercial Vehicle Insurance Important?
01
It is mandatory under the Motor Vehicles Act to have at least third-party insurance for commercial vehicles to avoid fines and legal trouble.
02
Accidents, theft, or disasters can cause heavy losses. Insurance helps cover repair or replacement costs and protects your business assets.
03
It safeguards you from financial liabilities if your vehicle causes injury, death, or property damage to another person or party.
04
With proper insurance, you can operate your business confidently knowing your vehicle, driver, and liabilities are well protected.
Top Benefits of Commercial Vehicle Insurance
Add-On Protection
You can extend your policy with helpful add-ons like engine protection, zero depreciation, roadside assistance, and personal accident cover. These offer extra safety and convenience when needed most.
Covers Multiple Risks
Comprehensive insurance protects against various risks including theft, floods, fires, accidents, and vandalism. It provides all-around protection for vehicles essential to your business operations.
Peace of Mind
Knowing your commercial vehicle and liabilities are insured lets you operate with confidence. It reduces stress and allows you to focus on running your business effectively without constant worry.
Business Continuity
Vehicle breakdowns or losses can stall operations. Insurance helps restore your vehicle promptly, minimizing downtime and keeping your business workflow steady and reliable.
Own Damage Protection
If your vehicle gets damaged due to accidents, fire, natural disasters, or riots, the policy covers repair or replacement costs. This reduces financial burden on your business and ensures quicker recovery.
Third-Party Liability Cover
The policy covers any legal or financial obligations if your vehicle causes injury, death, or property damage to another person. This prevents unexpected legal troubles and out-of-pocket expenses.
Legal Compliance
Commercial vehicle insurance ensures you meet legal requirements under the Motor Vehicles Act. It helps avoid penalties, fines, or confiscation during traffic checks and protects your business reputation.
Insurance Do's and Don'ts
Follow these best practices to get the most out of your Vehicle insurance policy.
Do's
Always compare different insurers and plans to find the best coverage and premium suited to your business needs.
Do's
Understand the inclusions, exclusions, and terms before purchasing. It helps avoid surprises during claim settlement.
Do's
Select relevant add-ons like roadside assistance or zero depreciation to enhance your vehicle’s protection.
Do's
Provide correct vehicle details, usage type, and previous insurance history to avoid claim rejections.
Don'ts
Letting your policy lapse may lead to loss of coverage and higher renewal premiums.
Don'ts
Opting for a lower Insured Declared Value (IDV) may reduce premium but can cost more during claims.
Don'ts
Follow all required procedures like immediate intimation and documentation to ensure claim approval.
Don'ts
Using a personal insurance plan for commercial use is risky and may void your policy completely.
Common Mistakes to Avoid
Policy Lapse
Allowing your insurance policy to expire without timely renewal can leave your vehicle unprotected and lead to financial and legal troubles.
Ignoring Add-Ons
Overlooking useful add-ons like engine protection or roadside assistance can limit coverage when your vehicle needs it most.
Delaying Claims
Not informing the insurer immediately after an accident or damage can result in claim denial due to missed timelines or incomplete records.
Wrong Vehicle Classification
Insuring a commercial vehicle under a personal policy is a major error that may lead to claim rejection or policy cancellation.
Underestimating IDV
Choosing a lower Insured Declared Value (IDV) to save on premium may result in insufficient compensation during total loss or theft.
Incomplete Disclosure
Hiding key details like prior damages, claim history, or modified usage may lead to policy voidance or rejection of future claims.
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What is the validity of a motor insurance policy?A standard motor insurance policy in India is valid for one year from the date of issuance. After this period, you need to renew your policy to continue enjoying the coverage. Some insurers now also offer long-term policies with validity for 2-3 years.
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Can I change insurers during renewal?Yes, you can switch to a different insurance provider when your policy is up for renewal. Make sure to initiate the process a few weeks before your current policy expires to avoid a coverage gap. You can also transfer your accumulated No Claim Bonus (NCB) to the new insurer.
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What is a cashless garage?A cashless garage is a service center that has a direct partnership with your insurance company. If you get your vehicle repaired at one of these garages after an accident, the insurer will settle the bills directly with the garage, eliminating the need for you to pay upfront and then file for reimbursement.
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Does motor insurance cover accessories and modifications?Standard motor insurance policies typically cover factory-fitted accessories but not aftermarket additions or modifications. However, you can get coverage for these by declaring them to your insurer and paying an additional premium. Failing to disclose modifications could lead to claim rejection.
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How does No Claim Bonus (NCB) work?No Claim Bonus is a discount on premium that you earn for each claim-free year. It starts at 20% after the first claim-free year and can go up to 50% after five consecutive claim-free years. NCB is transferable when you change your vehicle or insurer.
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Can I drive someone else's insured vehicle?Yes, you can drive someone else's insured vehicle with their permission. The insurance coverage follows the vehicle, not the driver. However, the driver must have a valid driving license and must not be in violation of any policy conditions such as driving under the influence of alcohol.
@2025 Vehicle Insurance Info