Key Differences in Car Insurance Inclusions for Private Vs Commercial Vehicles

Driving is always a wonderful experience, be it for a road trip, a short outing with family, or even that leisurely drive with your loved one. However, driving on Indian roads comes with its own risks. India has been on the top of the list of countries with the most road accident fatalities since 2009. Over 4.5 lakh accidents are reported in India annually causing over 1.5 lakh deaths and almost 5 lakh injuries^[1]. Moreover, almost 2.5 lakh vehicles get stolen in the country each year out of which only around 25 per cent are recovered^[2]. So, it is imperative to insure your car with a comprehensive vehicle insurance policy, that could cover you against financial losses of all kinds.

Vehicle purchase in India can broadly be categorised in two ways based on their usage: private and commercial. However, irrespective of the usage, both of them need to have an insurance cover as mandated by the Indian government. While a private car insurance policy protects the vehicle from natural calamities, accidents, theft and others, commercial car insurance liability only offers a slightly different coverage. The difference between the two insurance policies is mainly due to the difference in usage.

Having said that, here are a few important differences between private and commercial vehicle insurance liability only policies on offer in India.

Scope of Coverage

A private car insurance policy offers financial coverage to the owner-driver of the vehicle and the third-party against damages or losses due to an accident. It also covers the vehicle against theft, natural calamities, fire and riots, in case of a comprehensive policy. Such a policy, however, does not cover the vehicle if it is used for business or commercial purposes. A private car insurance policy normally does not include a passenger cover, although it could be bought separately as a rider. This policy also excludes coverage for personal drivers if you have not voluntarily opted for that rider.

A commercial vehicle insurance liability only policy offer protection against legal liabilities due to death or disability caused by your vehicle to other persons. It is also a policy that covers accident related damage to property. For instance, you can opt (add-on) for coverage over a wider geographical area as well as personal accident cover for your driver, cleaner or maintenance personnel involved in the upkeep of your commercial vehicles. Please read the policy terms and conditions before making any purchase.

Risk Involved and Insurance Premiums

Commercial vehicles are exposed to a higher degree of risk compared to private vehicles because of their significantly higher usage -- due to the repeated trips made carrying commodities or passengers from one place to another. A car used for a commercial purpose is also more prone to accidents and third-party liabilities because of this. Hence, the insurance premiums on such cars are significantly higher. A private car, however, has lower premiums due to its comparatively lower usage and lower degree of risk.

Legal Mandates

In case of a private car insurance policy, it is mandatory for the vehicle owner to have a third-party cover. However, a commercial car insurance liability only policy needs to cover third-party liabilities, due to death or disability caused by your vehicle to other persons.

Insurance Claim

Claiming insurance for a private car policy is much simpler and may not necessarily involve filing an FIR and conducting a spot survey, depending on the insurer you choose. For example, if you hold a private car insurance policy of Bajaj Allianz General Insurance, you can even file an online claim and get it settled instantly (terms and conditions apply). On the other hand, a commercial insurance liability only policy claim requires a mandatory spot survey by the insurer. Also, the owner of the commercial vehicle will need to file an FIR with the police, only after which the remaining process of claiming insurance can be moved forward.

Documents Required for Insurance Claim

Owners of private vehicles will be required to submit their registration certificate (RC), driver's licence and the taxation book to claim the insurance. However, it's not so simple for the owners of commercial vehicles. These owners, in addition to the RC, driver's licence and taxation book will also have to showcase vehicle permit, trip sheet, fitness certificate, load challan and a copy of the FIR.

No matter which kind of vehicle you own, Bajaj Allianz General Insurance offers both private and commercial vehicle liability only insurance coverage, each with its own set of advantages and add-on benefits. For your commercial vehicle third party liability only, Bajaj Allianz allows you to opt for coverage over a wider geographical area. You can also go for personal accident cover not only for your driver, but also for cleaner or maintenance personnel involved in the upkeep of your commercial vehicles. It also offers add-ons specifically for CNG and LPG powered cars.

And, if you own a private car, Bajaj Allianz has a range of insurance solutions for you as well including features like cashless claims, transfer of no claim bonus, and on the spot settlement. Moreover, you can buy a car insurance policy in few minutes and can choose from a range of add-on options.

It is very crucial to know which kind of insurance is applicable for your vehicle based on the usage, and what kind of benefits you are supposed to get. When you know that, you can then compare plans and choose the right policy and the right insurer. So go-ahead and select the best insurance policy for your car. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Source:

[1] https://timesofindia.indiatimes.com/india/this-is-what-makes-indian-roads-deadliest/articleshow/78870630.cms

[2] https://ncrb.gov.in/sites/default/files/CII%202019%20Volume%203.pdf