What is Commercial Vehicle Insurance Policy ?

A commercial vehicle may be a source of livelihood for you & your family members. Any accident or theft to the vehicle may result into huge financial loss to you or may even result into closure of business. Living with such uncertainties is very risky hence requires an insurance policy to minimise such uncertainties & risk.                                                                                                                            Commercial Vehicle Insurance is a customized motor insurance policy to cover for damages and losses caused to or by a commercial vehicle and the respective owner-driver. This could include damages and losses in situations such as accidents, collisions, natural calamities, fires, etc. It is mandatory for all businesses to buy commercial vehicle insurance for their vehicles, such as for auto-rickshaws, cabs, school buses, tractors, and trucks, etc. amongst others.

Commercial vehicle package policy provides the insurance cover not only for the liability arising out of the third party but covers you against the financial loss because of theft or accidental damage to your vehicle.

Third Party Insurance plans offer protection against legal liabilities due to death or disability caused by your vehicle to other persons. It is also a policy that covers accident related damage to property. In the event of death or permanent disability, the maximum pay-out will be provided to the third-party victim.

Why Do You Need Commercial Vehicle Insurance?

If you own one or many commercial vehicles for business purpose, it’s necessary to get commercial vehicle insurance that will financially protect and cover your business from any losses and damages caused to and by your vehicle and the people using it.

Your business requires the usage of vehicles, such as a cab service or school bus, commercial vehicle insurance will assure your stakeholders and passengers, that they are always protected and covered.
It is mandate by law, minimum have a third party or liability policy in place, that protects third parties against any damages and losses that could be caused by your commercial vehicle.

What’s Not Covered in Commercial Vehicle Insurance Policy ?

As per the standard commercial vehicle insurance policy, following cause of losses not covered:

  • Cyclones, hurricanes, flood, forest fires, landslides, lightning strikes or any other called upon the gods for mercy.
  • Technical breakdown or regular wear and tear repairs of the vehicle are not covered.
  • If the previous year policy is not valid or NCB declared is not valid.
  • Damages or losses from driving outside the designated geographical location without geographical extension i.e. outside India.
  • Damages that arise when driving under the influence of alcohol, drugs or such substance.
  • Damages that arise when driving without a valid license (Trans, Bus batch, Permit etc.).
  • Damages that arise when car insurance policy is not active.
  • Damages caused due to negligence of the driver.
  • Disclosure or misappropriation of information provided.
  • If vehicle is overloaded as per approved capacity as per RC.
  • If a goods carrying vehicle used for transportation of people, and or number of people found to be more than the designated number allowed as per RC.
  • If the vehicle found to be used for a different purpose other than the specified purpose on permit or being used outside the premises mentioned in the permit.
  • Damages caused due to speed racing, crash testing, etc.
  • Damages or losses not covered if the owner of the vehicle has changed as per RC and not updated on policy with insurance company.
  • Any alterations done to the vehicle without informing insurance company and RTO (CNG kit being installed without RC updation from RTO).
  • Any mandatory documents or certificate issued from government authorities (RTO office) and could not be produced for verification.
  • Insurable interest is an essential requirement and if insurable interest violated (incase of owner transfer or death of the proposer of insurance).
  • Damage caused due to driving the vehicle on incorrect routes, a gross violation of general traffic rules.
  • Consequential loss; if the original damage causes loss or subsequent damage, only the original damage will be covered.

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Documents Required for Filing Commercial Vehicle Insurance Claim

While filing a claim, the owner is required to produce following documents (original documents need to be verified and copy need to be submitted to insurance company):

  • The claim form, duly filled and signed (stamp incase of organisation) by the insured person himself.
  • A verified copy of the First Information Report (FIR) or Policy Panchanama.
  • Spot survey photos, videos and report from an company assigned surveyor.
  • A copy of the vehicle’s Registration Certificate (RC).
  • A copy of the vehicle’s valid fitness certificate, Permit (state and national) issued from RTO.
  • A copy of the driver’s license (TR, Trans, Batch etc. based on the type of vehicle).
  • A copy of the policy documents.
  • Load challan and Eway bill.
  • Body invoice if body built externally.
  • List of passengers in case of bus, rickshaw, taxi etc.
  • The original keys to the vehicle (incase of theft/total loss).
  • RTO transfer papers duly signed with Form 28, Form 29 and Form 30.
  • NOC and Form 35 from the bank or lender, where the car has an active loan.
  • No Trace Report from the police and court in cases of theft of the vehicle.
  • Insured person’s KYC documents and cancelled cheque for bank details.
  • Factors Impacting Insured Declared Value.
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