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Commercial Vehicles Aren’t Same as Your Private Vehicles. What About Insurance?

Different types of vehicles ply on the roads to serve various purposes for people, businesses and the society at large. The two most common uses are helping people commute and carrying goods from one place to another. Based on that, vehicles are broadly divided into two categories, namely, private and commercial. 

While these two types of vehicles have different usage, both need to be insured to meet with the legal requirements as well as to cover the owner’s risk. There are not many differences between the insurance policy provided to these two kinds of vehicles, except the degree of risk included in each case. 

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Commercial vehicles have a higher rate of risk involved as compared to private vehicles. The reason behind this is that commercial vehicles are used for business purposes, such as for hauling equipment, delivering goods or transporting people.

The reasons why a commercial vehicle has more risk attached to it are as follows-

• More likely to be driven every day 
• Driven over long distances 
• Driven over different kinds of terrains and in various areas, including highways and urban areas

All these factors increase the likelihood of commercial vehicles facing damages or incurring a third-party liability. This also increases the chances of claiming for an accident or other loss in the future. Owing to this factor, the owners face higher risk of meeting with a financial burden. 

Since a commercial vehicle may be a source of livelihood for many families, any damage or theft can result in substantial financial losses for the owner. In the worst case, it may even lead to shutting down of business. Hence, ownership of a commercial vehicle requires an insurance policy to minimize insecurity.  

Most of the people know well about private car insurance. However, when it comes to buying commercial vehicle insurance, business owners have several doubts. 

How to buy Commercial Vehicle Insurance?

In general, standard vehicle insurance policies do not cover a car if it is used for commercial purposes. However, if a vehicle is used entirely or partially for commercial purposes, then it is essential to get commercial vehicle insurance online or offline for the same. 

Commercial vehicle owners can lower their risk by buying vehicle insurance from a reputable insurer like Tata AIG. They provide security not just against third-party liability, but also damage or theft, along with several add-on benefits. Their policies cover goods and passenger carrying vehicles, taxies, tractors and cranes. 

The insurance rates for commercial vehicle insurance is slightly higher than that for private vehicle insurance because of increased risk. However, while buying commercial vehicle insurance, you must keep the following points in mind- 

• Higher Coverage- A commercial vehicle owner should buy a policy with higher coverage for his vehicles, even if it requires him to pay a slightly higher premium. It is because of the higher level of risk that such vehicles face. 

• Earliest Renewal- It is essential to renew the policy timely so that it does not lapse. Otherwise, the vehicle will be at greater risk, and the owner will lose insurance benefits. 

Many policyholders also do not know what no claim bonus` (NCB) is. It is a benefit that they get when they do not file any claim during the policy tenure. Therefore, timely renewal of commercial vehicle insurance online is essential.

• Additional coverage- Most of the renowned insurers provide add-on benefits like depreciation reimbursement cover and consumables covers. Opting for these benefits at the cost of an extra premium will ensure that the vehicle owner receives maximum security in case of a contingency and faces minimum financial burden.

Motor Vehicle’s Act makes it mandatory for all kinds of vehicles to have third-party insurance coverage. Along with meeting this legal requirement, every vehicle owner should secure their commercial vehicles with adequate insurance cover to minimize losses and maximize security.