All about Commercial Vehicle Insurance in India Explained

The world around us is moving fast because we are better connected now. Businesses run better as there exist excellent transport facilities both domestic and international. But can we use any kind of vehicles like a car or bus to transport any category of goods? Certainly not. You can only use vehicles as per their registration which specifies how the vehicle will be put to use. Like the passenger buses, we see which run across the city and trucks or lorries that carry goods are put under the Commercial Vehicle Category. But why have these been named as Commercial Vehicle?

What is a Commercial Vehicle?

When you use a vehicle to transport either goods or passengers and earn money out of it, you are using it for commercial purposes. Example: You have a Swift Dzire that is used as a cab for Uber. As this vehicle is a source of livelihood for you, you would never want anything to go wrong to these vehicles. In other words, any damage to the vehicle will hinder your business activity.

So how to safeguard your vehicle that takes care of your bills? Yes, Commercial Vehicle Insurance is the answer!

Now, What is Commercial Vehicle Insurance?

Your business may involve transporting people, delivering goods, picking up supplies, transporting equipment to a site. And taking your business and vehicles on the road is always vulnerable. Commercial vehicle insurance is designed to cover losses when you or your employee is involved in the accident while driving for work purposes. This policy covers damages of business owned vehicles like fleets of cars, trucks, even the personal vehicles you use to rent or lease. Similar to personal car insurance policy, Commercial Vehicle Insurance can be chosen either as a Packaged Cover or a 3rd Party Liability only policy.

Benefits of Commercial Vehicle Insurance

  • Makes your law-abiding: Saves you from extensive penalties levied by the government. In the absence of insurance policy, your vehicle can be pulled over and seized by the traffic police. A third-party liability policy is mandatory by law.
  • Keeps you away from financial headache: It protects you when your commercial vehicle gets damaged due to accident, fire, theft, earthquake, flood, fire or self-ignition, malicious act or terrorist activity. The idea is to protect you from unexpected financial expenses for the repair and let you focus more on the business.
  • Cover third party liabilities: The insurer pays you for any third-party liability that may occur due to bodily injury or property damage.
  • Quick Repairs to prevent business impacts: If you own a Commercial Vehicle Insurance, you can quickly get it repaired completing the formalities. It will save time and further prevent a long-time impact on your business.
  • Pays for the personal accident of owner/driver: Reimburses the policyholder (driver/owner) in case of an accident which may further result in any permanent disability or death.
  • You can tow disabled vehicles without any stress: Insurance policy prepares your vehicle for any possible damage that may occur while mechanically towing a disabled vehicle.
  • Gives you peace of mind if you are in loan: Generally, vehicles are bought on loan. So you must be thinking what if your vehicle got stolen or you suffer from a complete loss? Well in such cases, your loan can be covered if you have comprehensive commercial vehicle insurance.

What types of Vehicles are covered under the Commercial Vehicle Insurance?

You should know that the vehicle of any category is registered with state RTO and has some limitations to use. For Commercial Vehicle Insurance you may get these types of vehicles covered:

  • Goods Carrying Vehicles: You can have tempos, loading vehicles, and trailers that help to transport goods from one place to another are considered Goods carrying vehicles.
  • Passenger Carrying Vehicle: Vehicles like bus, taxi, cabs, autos that carry passengers for earning are included under Passenger Vehicles.
  • Heavy Vehicles: All types of trucks like a box truck or semi-trailer truck, vehicles used for mining and construction falls under the heavy vehicle category. In heavy vehicles like truck, the liabilities are huge. A truck insurance is your real friend in all those scenarios.

What are the consequences if you don’t have Commercial Vehicle Insurance?

If you do not have a Commercial Vehicle Insurance and still put your vehicle to use, then :

  1. You may not be allowed to cross the state boundaries, if you do so, for business purposes.
  2. Your vehicle will be seized and you will be forced to pay penalties if you drive without insurance policy.
  3. If you are incapable of bearing the losses, you will have no financial help. Remember the magnitude of loss from a Commercial Vehicle can be massive and beyond capacity to pay.