What is Commercial Car Insurance and its Various Advantages?


Commercial car insurance is a kind of insurance policy which covers a commercial vehicle against damages, natural or man-made. This type of insurance plan also offers coverage to commercial vehicle owners against any liability arising due to damages caused to a third-party. Read on to know more about this type of insurance and its benefits.

What is commercial car insurance?

As the name suggests, this type of insurance policy is specifically designed for commercial cars and vehicles, which are used for business purposes. The various components of commercial vehicle insurance are:

Third party insurance cover

According to the Motor Vehicles Act, 1988, it’s mandatory for every vehicle plying on the road to have a third-party insurance cover. The third-party insurance cover is also called ‘liability only cover.’ It covers the damages caused by the insured commercial vehicle to a third party.

If a person gets seriously injured or loses his life from the insured commercial vehicle, the insurer compensates for the losses suffered. The policy also takes care of the costs associated with the legal nitty-gritties arising in such a situation. It’s important to note that this type of insurance doesn’t provide any coverage to the policyholder in case of any untoward incident.

Comprehensive insurance cover

This type of commercial vehicle insurance provides comprehensive protection as against a third-party cover. It is more inclusive and highly recommended for all commercial vehicle owners.

It not only covers losses or damages to the insured commercial vehicle due to accidents, but also provides coverage for losses caused due to natural or man-made calamities such as earthquake, flood, lightning, theft, burglary, etc.

Benefits of commercial motor insurance

  1. Coverage for losses and damages suffered due to accidents and otherwise

All types of business activities related to transportation are exposed to numerous risks on a day-to-day basis. Theft or damages to a commercial vehicle can inflict operational losses to enterprises. A commercial vehicle insurance plan in place helps compensate for the losses incurred to some extent.

  1. Backup for loan payment

Most commercial vehicles are purchased with the help of loans, the EMIs of which needs to be paid on time. Often the EMIs are paid through the profits generated from these vehicles.

In unfortunate circumstances such as theft and accidents, your commercial vehicle becomes inoperative and in such a scenario, it’s difficult for you to pay the EMIs. However, commercial vehicle insurance, serves as a backup in such a scenario.

  1. Covers expensive repair works

Large commercial vehicles such as buses, tractors, and small utility vehicles often require regular maintenance and may require expensive repair even in case of minor collisions. By availing a comprehensive commercial vehicle insurance plan, you can get cover for such expenses, without requiring to shell out money from your pocket. This keeps your personal as well as business finances on track.

Car insurance, in a nutshell, safeguards the interests of business enterprises deploying commercial vehicles. It provides peace of mind to such vehicle owners by providing adequate compensation and minimising losses caused due to unforeseen situations. It is imperative for policyholders to carefully read the documents before buying this policy.

You can buy commercial vehicle insurance online or offline. Today, there are many insurance aggregators which list offerings from multiple insurers. You can compare quotes, read reviews, and even talk to experts before zeroing on a policy.

Irrespective of whether you buy a policy online or offline, make sure to go through the policy documents carefully and be aware of the inclusions and exclusions. At the same time, check the claim settlement ratio of the insurer and choose a plan that best aligns with your needs.

You can also avail other policies for your car. Pocket Insurance from Bajaj Finserv offers a gamut of insurance solutions at an affordable premium. One such offering is the key replacement insurance that offers coverage of up to Rs. 20,000 for lost keys of your car at just Rs. 499.

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