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What Is The Cost Of Insurance For My Commercial Vehicle?

Commercial vehicle insurance covers damages and/or losses caused to a commercial vehicle due to an accident, fire, or natural calamities. It keeps you and your business protected from these unforeseen circumstances. Be it passenger-carrying vehicles like buses, taxis, etc. or goods carriers like trucks, trailers, etc. they are used on an everyday basis and are exposed to higher risk. Therefore, commercial vehicle insurance becomes very important to cover them against all odds. Remember, any mishap to your commercial vehicle without valid commercial insurance may put you and your business in huge financial trouble. As per law, it is mandatory for all businesses to buy commercial vehicle insurance for their commercial vehicles. Now let’s look at the types of commercial insurance.

Third-party Commercial Vehicle Insurance

This is mandatory by law. Third-party commercial vehicle insurance is basic commercial vehicle insurance that offers protection to a third person, property, or vehicle that may lead to demise, bodily injury, or damage due to an accident with your insured commercial vehicle.

Comprehensive Commercial Vehicle Insurance

Comprehensive commercial vehicle insurance offers full protection to your commercial vehicle against uncertainties. In addition to third-party protection, comprehensive commercial vehicle insurance offers protection against man-made and natural disasters such as accidents, fire, theft, riot, explosion, earthquake, floods, etc.

Factors That Determine Commercial Vehicle Insurance Cost

Be it a passenger carrying vehicle or goods carrying vehicle, the following factors will be considered to assess the insurance cost of your commercial vehicle.

Insured Declared Value (IDV) of the vehicle

Age of the vehicle

Type and model of the vehicle

Fuel type of vehicle

Place of registration

Another important factor is the depreciation. With age, the value of the vehicle depreciates and based on this, Insured Declared Value (IDV) is fixed considering the manufacturer’s listed selling price. The below table shows you the depreciation rate

Vehicle Age

Depreciation (%)

Less than 6 months


Between 6 months to 1 year


Between 1 year to 2 years


Between 2 years to 3 years


Between 3 years to 4 years


Between 4 years to 5 years


Between 5 years to 10 years


Exceeding 10 years


You should not buy commercial vehicle insurance just for the sake of buying it. Depending on your requirements, compare them based on the coverage, premium, benefits and claim settlement ratio of the insurance companies. It is recommended to buy comprehensive commercial vehicle insurance that covers both third-party damages and own damage. You can also use online commercial insurance calculators to get an idea about how much you will pay towards premium.

Planning to buy new commercial vehicle insurance? Choose Chola MS for the best commercial vehicle insurance and stay free of worries.

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