Commercial Vehicle Insurance

text underline starline

Policies for "Commercial Vehicles"
Commercial Vehicles Insurance

Suitability :

Insurance of all motor vehicles including commercial vehicles is mandatory under the provisions Motor Vehicles Act, 1988. However, certain special applications of the Act define the limits of usage and requirements of policies.
One should possess a valid "Act Policy" to use a commercial vehicle in a public place and should include liability of passengers being carried. However, vehicles plying within the private premises of the insured are exempt from getting Act policies, like in the case of vehicles plying in aerodrome premises and in factory premises.

In case the vehicle is purchased under Hire Purchase agreement, the financiers insist upon a Comprehensive Policy to take care of their interest as collateral security.

All Commercial vehicles are classified into:


Salient Features :

Insurance companies issue Policy A for "Act Risks"and Policy B for Comprehensive Risks under the Motor Vehicles Insurance. Policy A ("Act Policy")

Policy A covers risks required to be covered under the Motor Vehicles Act. It is mandatory that every car owner be covered against Act Risks under Section 146 of Motor Vehicles Act 1988.

The scope of cover is to pay compensation for death of or bodily injuries to third parties and damage to the property of third parties. While the insured is treated as the first party and the Insurance Company second party, all others would be third parties.
As per requirements of the Motor Vehicles Act, while compensation for personal injuries to third parties is unlimited, property damage is limited to Rs.6,000 only. This limit can be enhanced on payment of additional premium.

Policy B (comprehensive)

This policy covers all the risks of Policy A (Act) as well as the loss of or damage to insured's vehicle also.

The perils covered are:

1. Damage to vehicle by accidental external means, fire, lightning, explosion, self-ignition, Burglary Housebreaking
2. Riot & strike, malicious acts and terrorist acts
3. Earth quake
4. Flood, inundation, cyclone etc
5. Landslide/ rockslide while in transit by rail, road, air, inland waterways, lift or elevator.

Policy B can be restricted to loss or damage due to fire or theft or both fire & theft in combination with policy A or without

1. In case of "Act Policy" + fire or theft, the premium is only 25% of own damage premium + Act Premium
2. In case of Act + Fire & theft, the premium is 40% of own damage premium + Act Premium
3. These extended covers can be obtained without inclusion of "Act" risks, provided the vehicle is not put to use.

The geographical limits for use of the vehicle is India but the limits can be extended to Nepal & Bhutan without extra premium and to Bangladesh by charging an extra premium of Rs.50 for comprehensive policy and Rs.10/ for Act policies.
Policies can be issued for periods less than one year. In such cases, short period scales are charged, which are higher than pro-rata rates. Long-term policies can be issued for "Act" only risks

No claim Discount: For every claim free year, the insured is rewarded with discounts in premium up to an extent of 35% (Policy B only). In case of adverse claims, premiums are loaded with Malus.

Benefits :

Policy A :

The policy pays compensation awarded by a court of law, for death of or bodily injuries to third parties including passengers being carried and crew engaged for operation and maintenance of the vehicle.

It also pays damage to the property of third parties up to a limit of Rs. 6,000

Policy B:

This policy covers all the risks of Policy A (Act) as well as the loss of or damage to insured's vehicle also.
Temporary spot repairs and/or towing charges to repair workshop & delivery for repairs up to Rs.1,500 are also paid

Extra Covers :

We Deals In All General Insurance Companies :