What is Commercial Vehicle Insurance and What are the Types of Vehicles Covered?


If you are a motor vehicle owner in India, you probably already know that you need to avail a third-party liability insurance policy for it. This is because, according to the Motor Vehicles Act 1988, every vehicle plying on Indian roads should have the least of a third-party insurance policy in place, or their owners can be penalised for violating traffic rules. This fine can amount to Rs. 2000 and Rs. 4000 for repeated offence.

However, when it comes to seeking an insurance cover, most individuals limit their needs towards getting one for their private vehicles.

But what about commercial vehicles?

Well, if you own a commercial vehicle, you can avail an insurance policy for it as well!

Insurance companies like Digit bring customised motor insurance policies that provide financial protection if you happen to damage your commercial vehicle in an accident or during instances of theft, as well as third party liabilities.

Following is an elaboration on commercial vehicle insurance, the types of vehicle it covers and the benefits it imparts.

What does Commercial Vehicle Insurance Entail?

A Commercial vehicle insurance, like other motor insurance policies, provides financial protection against the losses incurred due to damages to your commercial vehicle in an accident and other such instances.

Commercial vehicle insurance can be of two types:

  • Third-Party Liability Insurance Policy – Seeking this cover is mandatory under the Motor Vehicles Act 1988. Every business must mandatorily purchase this insurance policy for their vehicle, be it an auto-rickshaw, a taxi or a truck.

Under this policy, the policyholder can avail coverage for any third-party damage that is caused by their commercial vehicle. This includes bodily injury or death of a third person, damage to a third-party property or vehicle in an accident, as well as any litigation issues that might arise in due course.

  • Comprehensive Insurance Policy – While a third-party liability insurance policy covers damages to another person and his/her property, a comprehensive cover provides a better-rounded coverage to your own commercial vehicle. This includes the damages your vehicle incurs in an accident, fire, or due to any natural or man-made calamity. Further, the comprehensive cover also allows you to recover the cost of your commercial vehicle if it is stolen or damaged beyond repair.

These are the two types of insurance policies that you can avail for your commercial vehicle.

But, which vehicles are covered under commercial vehicle insurance policies?

Take a look!

Types of Vehicles Covered under the Commercial Vehicle Insurance Policy:

You can get the following categories of commercial vehicles insured under these policies –

  1. Passenger Carrying Vehicles

This category of commercial vehicles includes those that carry one or multiple passengers, like:

  • Private and school buses,
  • Auto-rickshaws,
  • Taxis,
  • E-rickshaws,
  • Taxis that are driven by tour agents,
  • Private cars that are used for commercial purposes, etc.

So if you are looking for a taxi insurance or an insurance policy for some other commercial vehicle, make sure you purchase the right one to get all the benefits.

  1. Goods Carrying Vehicles

This category includes the heavy-duty vehicles that are mostly used for transporting goods from one place to another. These include –

  • Trucks,
  • Tempos,
  • Panel vans,
  • Lorries,
  • Box trucks,
  • Chassis cabs, etc.


  1. Other Miscellaneous Commercial Vehicles

This is a broad classification of vehicles that do not come under passenger or goods carrying categories. These include the following –

  • Cement mixers,
  • Tractors,
  • Excavators,
  • Shovels,
  • Mobile rigs, etc.

You can avail a commercial vehicle insurance policy for each of these categories of vehicles. With commercial vehicles, the need for an insurance policy is much higher because the losses incurred are often much more substantial than that of private vehicles.

 Why Should You Insure your Commercial Vehicle?

Driving a commercial vehicle can give rise to many liabilities that you can avoid if you have this insurance policy in place:

  • Passenger carrying commercial vehicles have the task of ferrying people around every day, thus increasing their chances of getting into an accident by manifold. That is why an insurance policy, especially with the mandatory personal accident add-on is a necessity to ensure that unfortunate incidents like the driver’s death or disability due to an accident, are covered.
  • The livelihood of most people with commercial vehicles depends on the earning generated from it. That is why it is crucial to make sure that they can avail reimbursement if their vehicle is stolen or totalled in an accident. A commercial vehicle insurance policy acts as a safeguard during such instances and consequently ensures that the policyholder’s income-flow remains undeterred.
  • If you need to seek repairs for your commercial vehicle for damages it sustains in an accident, you can avail it easily from the number of network garages under your insurance provider without paying anything from out of your pockets.

Thus, availing a commercial vehicle insurance policy is extremely crucial if you drive any of the vehicles mentioned in the list above.

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