Commercial Vehicle Third Party Insurance

What is a Commercial Vehicle Third-party Insurance?

A commercial vehicle third-party insurance is a customized motor policy needed for all commercial vehicles such as trucks, school buses, auto-rickshaws, and taxis among other vehicles used for commercial purposes. It protects your business from any losses that may happen due to damages to a third-party vehicle, property or person.

In India, as per the Motor Vehicle act, at least having a third-party commercial vehicle insurance is compulsory. For example, say while driving, your truck collides and damages another vehicle on the road, in this case your commercial third-party insurance will cover for the losses caused to the damaged vehicle.

Commercial vehicle third-party insurance is a customized motor policy needed for all commercial vehicles such as trucks, school buses, auto-rickshaws, and taxis among other vehicles used for commercial purposes. It protects your business from any losses that may happen due to damage to a third-party vehicle, property or person.

In India, as per the Motor Vehicles Act, at least having a third-party commercial vehicle insurance is compulsory. For example, say while driving, your truck collides and damages another vehicle on the road, in this case your commercial third-party insurance will cover for the losses caused to the damaged vehicle.

Here are the types of vehicles covered under commercial third-party insurance:

• Passenger Carrying Vehicles: Insurance specifically for vehicles that transport one or more passengers, such as taxis, cabs, auto rickshaws, school buses, private buses, etc.
• Heavy Vehicles: Covers for any damages and losses for heavy duty vehicles such as bulldozers, cranes, lorries, trailers, etc.
• Goods Carrying Vehicles: Vehicles that typically carry goods to be transported from one place to another. These primarily include trucks, tempos and lorries.
• Passenger Bus/School Bus: Protects commercial buses, such as School Buses, Public Buses, Private Buses or Other Passenger Carrying Buses from damages to a third-party.
• Tractors/Agriculture Vehicles: Have your tractor or other agricultural vehicles protected from any accidents, damages and losses that could occur to any third-party.
• Commercial Van: Cover for vans used for business purposes, such as school vans, private vans and other vans used to transport passengers or goods.

Miscellaneous & Special Vehicles: Apart from cabs, taxis, trucks and buses, there are many other vehicles often used for and by businesses. Some of these may include special vehicles used for farming, mining and construction, among others.

Having a commercial vehicle insurance third-party policy is important; here’s why:

1. Mandatory by Law

As per Motor Vehicles Act in India, every commercial vehicle requires to have at least a third-party insurance policy. This ensures legal compliance and avoids penalties.

2. Covers Third-party Liabilities

A commercial third-party insurance policy covers third-party loss, damage, death or disability caused due to your insured vehicle, thus, providing financial protection in unfortunate events.

3. Cost-effective

This insurance policy is affordable as it covers only third-party liabilities, and also because the third-party commercial vehicle insurance price is set by IRDAI at nominal premium.

4. Avoid Traffic Fines

Since a third-party policy is mandatory by law, having one can save you from paying hefty fines for traffic violations.

5. Peace of Mind

With third-party insurance, you don't have to worry about unforeseen expenses related to third-party liabilities, allowing you to maintain peace of mind when driving.

Based on the requirement of your commercial vehicle, Digit offers two commercial vehicle third party insurance policies, which are:

1. Comprehensive Plan

A comprehensive commercial vehicle insurance is an extensive commercial vehicle policy that covers damage and losses caused to or by a commercial vehicle and the respective owner-driver, including those due to natural calamities, fires, thefts or accidents.

The comprehensive policy also allows you to opt for add-on covers that help enhance the coverage for commercial vehicles.

2. Third-party Liability Plan

A third-party commercial vehicle insurance is one of the most common types of commercial vehicle insurance; in which only damage and loss caused to a third-party person, vehicle or property are covered.

It is mandatory in India to have at least third-party liability insurance for commercial vehicles.

Also, no add-ons are available with this policy, and third-party commercial vehicle insurance price is already fixed by IRDAI.

To third party insurance for commercial vehicle online from Digit, furnish the following documents:

• Vehicle Registration Certificate (RC)
• Previous year commercial vehicle insurance policy, if applicable
• Any document among these for KYC verification - PAN/Aadhar/DL/Voter id/Form 16/Passport

Keep in mind the following important things before you file for a claim for third-party commercial vehicle insurance:

1. In case there’s an accident, the respective third-party has to file a FIR at the time of damage - and after this, the insurance company must be notified as well. If this is skipped, the required compensation can’t be made.
2. In an accident, it’s very important that the third party has valid evidence to prove that the opposition party is at fault.
3. In the case of minor damages and losses, it’s advised that you try and settle them out of court. This is because the process of filing a FIR and dealing with the Motor Vehicle Tribunal can be pretty time-consuming.
4. As per the rules and regulations of IRDAI, it is totally up to the Motor Accident Claims Tribunal to decide on the claim amount. While there is no upper limit on personal damage to a third party, in the case of damages and losses caused to a third-party vehicle or property, there is a limited liability of up to ₹7.5 lakhs.

To download your renewed or already active commercial vehicle insurance third party policy with Digit, follow the given steps:

Step 1: On the Digit app, go to the ‘My Policies’ tab at the bottom. All your current active policies will be displayed.

Step 2: Choose the policy for which you want to download the document. Check the details and then click on ‘Download Policy’. Your commercial vehicle insurance policy document will be downloaded.

Here are the benefits of getting a third-party insurance policy for commercial vehicles in India:

1. Covers third-party in case of personal damages

In case you get into an accident and hurt someone physically (or in the worst case cause a death), your third-party commercial insurance will cover the losses of the same, up to unlimited liability.

2. Covers for third-party property and vehicle damages

If your commercial vehicle happens to accidentally damage someone else's property or vehicle while driving, your third-party commercial vehicle insurance will cover its losses.

3. Protect yourself from any unexpected losses

With so much traffic these days, mistakes tend to happen! So, if your commercial vehicle happens to hurt someone or their vehicle/property, the policy will cover the expenses for these damages, so you don’t have to incur any unexpected losses.

4. Ensure that you’re driving legally

According to the Motor Vehicles Act of India, all vehicles must have a third-party commercial vehicle insurance, at least. If you’d like to protect your vehicle too, you can opt for a Comprehensive Commercial Vehicle Insurance Policy. This includes coverage for both third-party damages and protection for your own vehicle.

5. Protection from traffic penalties and fines

In case your vehicle is found to be on the road without at least a third-party vehicle insurance, you are liable for a fine of Rs 2,000 and/or up to three months in prison!

Despite many advantages, having a commercial vehicle insurance third party policy also has some setbacks, such as:

1. Doesn’t Cover Own Damages

A commercial third-party vehicle insurance unfortunately doesn’t cover damages and losses that occur to your own commercial vehicle (as it is a policy specific to third parties). If you want your own vehicle to be covered, then you should go for a comprehensive policy.

2. Doesn’t Cover for Natural Calamities

In the case of damage to your vehicle from any natural calamities, like an earthquake or a flood, your commercial vehicle third party insurance won’t cover your own vehicle. Again, if you think you need this coverage, you can instead opt for a comprehensive commercial vehicle policy.

3. No Customized Plans

A commercial third-party insurance is the most basic plan that you can have for your commercial vehicle. It cannot be customized with additional benefits and covers like theft or fire. However, you can opt for the same in a comprehensive commercial vehicle insurance.