Commercial Vehicle Insurance Coverage
Commercial vehicle insurance coverage in India can be broadly classified into two types: third party insurance and comprehensive insurance. While third party insurance is mandatory by law, comprehensive insurance provides a wider scope of coverage. Let’s explore the key differences between these two types of coverage.
Types of Coverage Options
Commercial vehicle insurance in India typically offers two main types of coverage options:
- Third-Party Liability Coverage: This type of coverage is mandatory for all commercial vehicles in India as per the Motor Vehicles Act, 1988. It provides coverage for damages or injuries caused to third parties in case of an accident involving the insured commercial vehicle. This includes third-party property damage and third-party bodily injury.
- Comprehensive Coverage: This type of coverage is optional but highly recommended for commercial vehicles. It offers broader protection and includes coverage for damages to the insured commercial vehicle as well as third-party liability coverage. It covers damages due to accidents, theft, fire, vandalism, natural disasters, and more.
Understanding important differences of coverage provided in third party & comprehensive insurance for commercial vehicles in India
| Coverage | Third Party Insurance | Comprehensive Insurance |
|---|---|---|
| Liability Coverage | Yes | Yes |
| Damage to Own Vehicle | No | Yes |
| Personal Accident Cover for Owner-Driver | Optional | Optional |
| Personal Accident Cover for Passengers | No | Yes |
| Legal Liability to Paid Driver | No | Optional |
| Geographical Coverage | Limited | Comprehensive |
| Add-On Covers | Limited | Extensive |
| Premium | Lower | Higher |
Add-On Coverage Options
In addition to the basic coverage options mentioned above, commercial vehicle insurance in India also offers various add-ons or riders that can be opted for to enhance the coverage. Some common add-ons include:
- Paid Driver Cover: Provides coverage for injuries sustained by a paid driver driving the insured commercial vehicle.
- Owner-Driver Cover: Offers personal accident coverage for the owner-driver of the insured commercial vehicle, providing financial protection in case of accidental death or disability.
- IMT23 Cover: This is an endorsement that can be added to the commercial vehicle insurance policy and provides additional coverage for damage to the insured vehicle due to accidental means.
- Geographical Extension Cover: Extends the coverage of the commercial vehicle insurance to other geographical areas outside the standard coverage region.
- Zero Depreciation Cover: Provides coverage for repairs or replacement of parts without considering the depreciation factor, resulting in higher claim payouts.
- Roadside Assistance Cover: Offers assistance in case of breakdowns, flat tires, fuel-related issues, or other emergencies while driving the insured commercial vehicle.
Frequently Asked Questions (FAQs)
FAQ 1: Is third-party liability coverage mandatory for commercial vehicles in India?
Yes, as per the Motor Vehicles Act, 1988, third-party liability coverage is mandatory for all commercial vehicles in India. It provides coverage for damages or injuries caused to third parties in case of an accident involving the insured commercial vehicle.
FAQ 2: What is comprehensive coverage?
Comprehensive coverage is an optional but recommended type of commercial vehicle insurance coverage in India. It offers broader protection and includes coverage for damages to the insured commercial vehicle as well as third-party liability coverage. It covers damages due to accidents, theft, fire, vandalism, natural disasters, and more.
FAQ 3: What are add-ons or riders in commercial vehicle insurance?
Add-ons or riders are additional coverage options that can be added to a commercial vehicle insurance policy to enhance the coverage. Some common add-ons include paid driver cover, owner-driver cover, IMT23 cover, geographical extension cover, zero depreciation cover, and roadside assistance cover.
FAQ 4: What is zero depreciation cover?
Zero depreciation cover is an add-on in commercial vehicle insurance that provides coverage for repairs or replacement of parts without considering the depreciation factor. This results in higher claim payouts and is beneficial in case of accidents or damages to the insured vehicle.
FAQ 5: What is roadside assistance cover?
Roadside assistance cover is an add-on in commercial vehicle insurance that offers assistance in case of breakdowns, flat tires, fuel-related issues, or other emergencies while driving the insured commercial vehicle. It provides peace of mind and convenience during unforeseen situations on the road.