What is the Eligibility Criteria for Commercial Vehicle Insurance?

Most businesses rely on some or the other form of transportation for carrying out their business activities. By far, the most common form of transportation is the road. Almost all business organisations, whether big or small own at least one commercial vehicle. This vehicle may be necessary either for procurement or for deliveries. In some cases, these vehicles are used for both and are an unskippable part of the supply chain.

Wouldn’t any damage or downtime of these vehicles have an impact on your business? Definitely, it would. Not only monetary loss, but also operational downtime is a result of it. Thus, in today’s day and age, it is imperative to have a motor insurance policy even for commercial vehicles.

What are the advantages of having commercial vehicle insurance?

When you have a vehicle registered for commercial purposes, a commercial insurance policy is a must buy. Here are the advantages of buying one –

Adherence to Law: Motor insurance policies are mandatory for every vehicle registered in India. This makes it a legal requirement for commercial vehicles too. Moreover, with the amended Motor Vehicles Act, 2019, there are hefty penalties for not carrying a valid copy of insurance.

Third-party cover: In case of an accident, there is damage to the vehicle of the insured as well as third-party. Commercial vehicle insurance ensures your insurance policy extends third-party coverage and prevents from any legal liabilities too.

Towing facility: Some commercial vehicle insurance policies offer the facility for towing your vehicles too. It is advisable to opt for this feature in your commercial insurance plan so that there is the least downtime for your operations.

No Financial Stress: Perils of the nature strike at most inopportune times. These include earthquakes, fires, floods and more that not only cause destruction to property but also have an impact on the business too. When you invest in a commercial insurance plan, it ensures your business continues to operate without any financial hiccups due to these perils.

What is the eligibility criteria for buying a commercial vehicle insurance policy?

The eligibility criteria is straightforward. In case you own a vehicle thatis registered as a commercial vehicle and is used in carrying out any commercial activity, you are eligible to purchase a commercial insurance policy. The only condition is that you must receive a monetary benefit in return of the services provided. Trucks, buses, tractors, heavy machinery like cranes and trailers, taxis or any other vehicle used to transport passengers or goods are some examples for which a commercial insurance policy can be opted.

What are the essential factors to consider when buying a commercial vehicle insurance plan?

When looking for a commercial policy, these are some of the essential facets that must be considered –

Flexibility of your insurance cover: One of the most critical factors that determine the purchase decision is how flexible is your insurer in offering a plan for your needs. Since every business has different needs for an insurance cover, there must be a certain degree of flexibility in buying insurance policies. Moreover, while accommodating your requirements, you must ensure the premiums are affordable to maintain a cost and benefit balance.

Claim Settlement Ratio: Claim Settlement Ratio or CSR is one of the critical things that a buyer must look at when buying any type of insurance policy. CSR is the ratio that depicts the percentage of claims settled as compared to the application for claims received.

Turnaround time: The turnaround time in settlement of your claim is crucial in opting for a particular insurer. The fast-paced and dynamic business environment requires quicker turnaround time for the claims filed so that the cash flow shall not be restricted for business activities.

Cashless facility: A few insurance companies extend cashless facility for commercial insurance plans too. Using this add-on facility to your motor insurance policy, you can ensure any cost of repairs or replacement to your vehicles is done without hampering your business cash-flows.

In conclusion, while checking for eligibility of your commercial insurance policy, make sure you also compare the different plans available using a motor insurance calculator. This will not only get you adequate coverage, but also at an affordable price. Be prudent and stay insured!

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