In India, lakhs of commercial four-wheelers like taxis ply the roads every day. The time these taxis spend on the road is very high. Given our road conditions, chaotic traffic and passengers’ frequent instructions, driving a taxi is not an easy task. Over a period of time, fatigue sets in for the drivers and causes a lapse in concentration. This can then result in an accident.
It is important for passenger-carrying businesses to secure their vehicles with commercial car insurance. This offers financial protection to the business from losses or downtime caused to the vehicle due to an accident. As per the Motor Vehicles Act, be it an individual or an organization, it is mandatory to have third-party commercial vehicle insurance. But it is recommended to opt for comprehensive commercial vehicle insurance as it covers both own damages as well as third-party liability. The following are the types of commercial car insurance cover
Third-Party Insurance Cover
As per law, every commercial vehicle must have a third-party insurance cover. It is a basic policy that does not include own damages. It only covers damages caused by the insured commercial vehicle to a third-party vehicle, person, or property.
Comprehensive Insurance Cover
Comprehensive commercial car insurance offers complete protection to your commercial vehicle. Though this is optional, it offers more protection than third-party insurance. It covers:
- Loss, damage, or theft of the insured vehicle due to accident, man-made and/or natural disasters.
- Bodily injury, death, or property damage to a third-party.
- Personal accident cover for the owner of the commercial vehicle that is insured.
- Option to buy additional coverage for passengers and/or drivers.
Exclusions f Commercial Car Insurance Cover
- Accidental damage or loss due to reckless driving under the influence of drugs or alcohol.
- Accidental damage or loss due to willful negligence of the driver.
- Accidental damage or loss that has happened beyond the scope of geographical limitations.
- Loss or damage caused by a driver who doesn’t hold a valid driving license.
- Consequential loss, wear and tear, depreciation, mechanical and electrical breakdown, brake failure.
- Loss due to radioactivity, war, nuclear weapons and related activities.
How Does Commercial Car Insurance Works?
- The policy seeker submits the commercial vehicle insurance application along with relevant documents to the insurance company.
- The insurer verifies the documents and calculates the premium based on the age, model and Insured Declared Value (IDV) of the vehicle.
- The insurance policy is handed over to the customer.
- In case of a claim, the policyholder communicates about the same to the insurer.
- A surveyor is appointed to assess and verify the claim.
- If the claim is considered to be genuine, the insurer approves the claim and initiates the settlement.
In the world of app-based taxis, ride-sharing apps and more, the number of trips has only increased. This means the vehicle runs for more time on the road and correspondingly the risk exposure is higher than ever before. Having commercial car insurance protects one from huge losses occurring due to accidents or damages which could wipe out profits, margins and cash flow. Also, in cases where commercial vehicles have been purchased on loans or under hypothecation, having commercial car insurance protects the owners from these loans if the vehicle suffers damage or a total loss due to an accident. For hassle-free commercial car insurance opt for Cholamandalam commercial insurance.