7 Reasons Why Two Wheeler Insurance Is Mandatory
For those who are not familiar with the law governing bike insurance—purchasing at least a Third-party Two-wheeler Insurance Policy is compulsory in India. This rule is in accordance with The Motor Vehicles Act. If you fail to comply with this law, you will have to face monetary penalties. You can also end up in jail for non-compliance! Worse, an accident caused by an uninsured bike can have severe legal consequences. But why is bike insurance mandatory in India? Read ahead to know the answer and other aspects related to the mandatory nature of vehicle insurance in India.
So how can you be prepared for such risks? This is where Two Wheeler Insurance will benefit you. A Two Wheeler, or Bike Insurance, will ensure that you are well protected financially.
Here are a few reasons for any vehicle owner to have an insurance policy:
- If anybody has bought a new bike, then he has to buy an insurance policy. Under the Motor Vehicles Act, the Government of India has made it mandatory for every bike owner to have an insurance policy.
- The bad condition of roads coupled with rash driving increases the chances of accidents. An accident can cause damage to vehicles inflict injuries or sometimes even result in loss of life. Loss of money is inevitable under these circumstances as one has to spend to repair the vehicle and get medical aid if injured. All the repair expenses can be taken care of by the insurance company if a policy has been bought. Thus, it will not burn a hole in your pocket and you don’t have to worry about unforeseen expenditure.
- Policies also cover damage to the bike by natural calamities like floods, earthquake, fire, etc. So, you can make a claim under these circumstances.
- A majority of bike owners are people with limited resources. Having an insurance policy ensures that they avoid the burden of unforeseen expenses in case of an accident or theft of the vehicle.
- With third-party Bike Insurance, one can file a claim for the damages to the other vehicle (which is called the third party) involved in an accident.
- The major reason for one to have an insurance policy is that it aids financial support to the policy holder for any expense incurred due to repair work of vehicle damaged in accidents, natural calamities etc. By just paying a small amount to buy the insurance policy, one can claim a reasonable amount of money in their time of need.
- It is sensible to take an insurance policy of your bike by paying a nominal amount of money, in order to avoid an additional burden to your budget if a mishap occurs with the bike.
Wondering how to pay Bike Insurance online? Click here to read more!
Looking to apply for a Two Wheeler Insurance through MMFS? Click here to get started!
The Necessity of Car Insurance in India
Whether you buy a vehicle for your own personal use or for commercial use, you need to make sure that it is covered by at least the minimum required car insurance. In India, a car insurance policy offers car owners a number of benefits, but that is not the only reason why your vehicle should be properly insured.
About Car Insurance
Car insurance, or motor insurance, is a contract between you and an insurance company that serves to protect your vehicle from a number of unforeseen risks. It is basically a protection against numerous losses that may be incurred as a result of theft or financial losses that occur because of an accident and any subsequent liabilities. You also have the option to purchase car insurance online, and the scope of coverage can be extended to you, the insured party, the vehicle under insurance, and to third parties. The premium that you have to pay for car insurance online depends on a number of factors, like the age of the car, its market value, the city where you reside, the type of coverage opted for, etc. The most important benefit of having proper car insurance is the fact that it gives you the confidence to drive with peace of mind. But, apart from this, there are several other reasons why it is necessary for you to have proper motor insurance in place:
It is a Mandate by Law
According to the Motor Vehicles Act or 1988, it is compulsory for every car owner to have at least a third party liability cover for his car before he can drive it on the road. A basic third party liability car insurance policy protects the driver-owner from any liabilities that may arise from an accident where a third party or third party property sustains damage. While this cover is the minimum mandated by the government, it is always a better idea to consider comprehensivemotor insurance plans in order to safeguard your vehicle in case of its own damage due to an accident.
Damage to the Insured Vehicle
Elaborating on the point mentioned above, if your car suffers any damage during a collision or accident, the expenses that you may incur to get the car fixed are reimbursed by the insurance company. On the other hand, if your car suffers from damage in a non-collision related scenario, where the damage is caused by natural or man-made calamities like a storm or riots, you can still claim for reimbursement for the expenses of fixing the car.
Loss of Vehicle
In case your car is stolen, you will get compensation from your insurance company. You will, of course, have to submit an FIR for the same before you can put in a claim. Once the police give a ‘No Trace Certificate’ which claims that your car cannot be traced, you can get compensation for your stolen car. Please note that the amount you will get as reimbursement will not be equal to the price of a new car, but the IDV of your car.
Insurance is a contract between you and the insurance company, and anyone else that is involved in an accident is referred to as a third party. Your car insurance policy, regardless of whether it is a liability only cover or a comprehensive cover, covers your legal liabilities for compensations that have to be paid because of an accident that was caused by your vehicle. This coverage includes liability for death or injury to third parties. Here, the third party can refer to any pedestrians, outsiders, occupants of other vehicles, etc.
You can choose from a large variety of add-on covers to enhance the overall coverage of your motor insurance, depending on your needs. For example, you can choose a roadside assistance cover that will allow you to avail assistance services in case your car breaks down; while this is an important and beneficial cover, it is especially important if you regularly travel long distances, or if you travel to far-flung areas. Other covers that you may choose from include zero depreciation cover, engine cover, no claim bonus retention, etc.
With the option to buy car insurance online, the entire process has been made quite convenient for customers; and there is no doubt that in India, having a car insurance policy in place is a necessary step for any car owner to drive with complete peace of mind.
**To understand exactly about the policy coverage, exclusions etc read the Policy Wordings carefully.**
Commercial Vehicle Insurance
According to the report published by The Ministry of Road Transport and Highways in 2019, 449,002 accidents were reported in 2019 across the country. Out of the total number of accidents, 1,51,113 deaths were reported. With a little more maths, this comes to close to 1230 accidents and 414 accident-related deaths per day.
These accidents involve all types of vehicles including commercial ones. The damages caused to the commercial vehicle in case of an accident or any unforeseen situation can directly affect the business and cause humongous financial losses. However, this cost can be reduced with the help of commercial car insurance.
Let’s take a walk through the meaning of commercial vehicle insurance, its advantages and various other nuances.
What is Commercial Vehicle Insurance?
Meaning of Commercial Vehicle Insurance
It is a vehicle used for transporting goods or carrying passengers. Vehicle insurance that offers a financial backup to a commercial vehicle in case of an unfortunate incident is called Commercial Vehicle Insurance. It is similar to vehicle insurance for private vehicles. However, the related coverage is specific to serve the needs of a commercial vehicle and the contingencies that may occur to such vehicles.
How to Buy Commercial Vehicle Insurance
You can buy commercial vehicle insurance online or offline. Nowadays, buying insurance for commercial vehicles online is more convenient and time-saving. If you buy insurance from us such as MMFS, buying insurance can also get the best premium discount offers.
Why is commercial vehicle insurance important?
Having the right insurance for commercial vehicles could help you repair the vehicle in case of accidental damage. You may need a commercial motor vehicle insurance policy if you.
- Transport people or goods for a fee in your vehicle.
- If you own one or more commercial vehicles since it protects you financially and covers your business from any losses caused by accidental damages to your vehicle.
- It is mandatory to have at least Third-party Insurance Policy as per The Motor Vehicles Act, 1988. Failure to insure your commercial vehicle can invite penalties.
Key Features & Benefits of Buying Commercial Car Insurance Online
Buying vehicle insurance becomes easier when you choose the online platform since it helps compare prices and services before you make the decision. It helps the potential buyer to adjust certain factors that affect the cost of insurance for commercial vehicles and know the approximate amount in advance. Commercial car insurance provides a financial backup in case of losses caused due to the damaged commercial vehicle. Here are the key features & benefits of buying insurance for your commercial vehicle.
Compliance with the Law
Buying a third-party commercial car insurance plan is mandatory by law in India for commercial vehicles. Failing to buy mandatory commercial vehicle insurance can invite serious penance. This is because the risk involved in driving a commercial vehicle, especially passenger-carrying vehicles like taxis, travel vehicles, etc. is extremely high.
Coverage Against Third-party Losses
The damage or injury caused to the third party due to a commercial vehicle can be of a higher magnitude. This attracts equal amounts of compensation that can prove to be a major financial loss for you. It can adversely affect the business as well. However, insurance provides a safety net against financial losses where third-party damage or injuries are concerned.
Coverage Against Own Damage
A commercial vehicle is one of the assets that help the vehicle owner keep the business running. Any kind of damages caused to this asset can have a negative impact on the business. In such a situation paying more money for the repair of the vehicle can be even more financially draining. Commercial insurance can help you safeguard your savings/income by paying for the repairs of the damaged vehicle.
Peace of Mind
Commercial Vehicle Insurance ensures that you remain stress-free and can continue to focus on the business. Buying insurance for your commercial car can bring relief to you in terms of damages to the insured vehicle and/or third-party damages or injuries.
Different types of Commercial Vehicle Insurance Plans
Liability Only Policy: Passenger Carrying Vehicle
This commercial vehicle insurance policy offers financial shield against third-party liabilities for passenger-carrying commercial vehicles. It is mandatory to insure your passenger-carrying commercial vehicles with this plan as per The Motor Vehicles Act. The policy provides coverage against death or bodily injury to a third party and damages to their property or vehicle.
Liability Only Policy: Goods Carrying Vehicle
As the name suggests, this commercial vehicle insurance policy offers financial protection against third-party liabilities for goods-carrying commercial vehicles. As per law, you must insure your vehicle with this mandatory motor insurance plan to avoid penalties. It provides financial protection against third-party liabilities that include death or bodily injury to a third party and damages to their property or vehicle.
Liability Only Policy: Miscellaneous and Special Type of Vehicles
This commercial vehicle insurance plan is designed for special and miscellaneous types of commercial vehicles. It offers financial protection against third-party liabilities. It is also mandatory as per The Motor Vehicles Act. Like the above two plans, it provides financial protection against death or bodily injury to a third party or damages to their property or vehicle.
Note: The above types of Commercial Vehicle Insurance Plans are subject to availability
What is Third-party Commercial Car Insurance?
Buying at least a Third-party insurance policy is mandatory in India. It covers any person that is directly or indirectly affected by the insured vehicle. Third-party vehicle insurance provides the following coverages.
1. Accidental third-party property damage
2. Accidental third-party bodily injuries
3. Death of the third party
What is a Comprehensive Commercial Car Insurance?
The Comprehensive type of vehicle insurance is exhaustive in nature. It not only provides mandatory coverage but also covers the insured vehicle against damages such as fire, riots, accidents, etc. Take a look at the following to understand the coverage in detail.
1. The entire coverage offered by the Third-party liability policy.
2. Coverage against theft of the insured vehicle.
3. Cover for damage against natural calamities (floods, earthquakes) and man-made calamities (riots, vandalism, bandhs).
4. Accidental damage while driving a car.
5. Coverage for damages against fire or explosion.
Inclusions: What is Covered in Commercial Car Insurance Policy?
This section lists the inclusions of a commercial car insurance policy. Inclusions are situations that are covered under an insurance policy. You can go ahead and raise a claim against the following situations.
1. Damages arising out of a malicious act not caused by the owner.
2. Damage due to fire, explosion, or if lightning strikes the insured vehicle.
3. The entire coverage offered by the Third-party car insurance policy.
4. Damage to the insured vehicle caused due to an accident.
5. Damage to the insured vehicle caused due to terrorist activity.
6. Damage due to man-made calamities like bandh, riots, vandalism, etc.
7. The damage occurred while the insured vehicle was being transported via water, rail, or land.
8. Damage resulting from natural calamities like earthquake, floods, hurricane, cyclone, landslide, hailstorm, frost, etc. Damage such as shock damage or fire damage due to a natural calamity is also covered.
9. Theft of the insured vehicle (burglary/breaking into a house is included in this coverage). Here, the owner is expected to submit the vehicle keys and the necessary documents.
Note: Personal Accident cover for the owner/driver is mandatory in India and needs to be bought separately along with the Third-party or Comprehensive commercial vehicle insurance policy. It covers both permanent disability/death while driving a car and the coverage will be maximum Rs. 15 lakhs during one policy period.
Exclusions: What is Not Covered in Commercial Car Insurance Policy?
Exclusions are situations that are not covered under an insurance policy. Meaning, you cannot raise a claim if the insured vehicle is damaged due to the following situations.
1. Damage due to electrical or mechanical breakdown.
2. Consequential losses are not covered.
3. Damage caused when driving under the influence of alcohol.
4. Damage caused when driving without valid documents.
5. Damage caused when involved in criminal activity or breaking the law.
6. Intentional damage to the insured vehicle.
Third-party Commercial Vehicle Insurance vs Comprehensive Commercial Vehicle Insurance
The primary difference between Third-party and Comprehensive Commercial Vehicle Insurance is the kind of coverage it offers. While the Third-party Insurance Policy only provides you financial protection against third-party losses, the Comprehensive Insurance Policy covers third-party losses and offers financial protection against damages or losses to the insured vehicle.
Opting for the right type of insurance is vital since it is not only mandatory as per law, it also avoids traffic penalties and even disqualification of your driving licence. Here is a comparison between Third-party Commercial Vehicle Insurance vs Comprehensive Commercial Vehicle Insurance.
|THIRD-PARTY COMMERCIAL VEHICLE INSURANCE||COMPREHENSIVE COMMERCIAL VEHICLE INSURANCE|
|Low premiums||Offers a wide range of coverage options|
|Coverage only for third party claims||Coverage for accidental damages to a third party and own damage|
|Coverage for the third party injury and accidental death||Coverage for more than just accidental damages (options to include add-on covers)|
|Coverage for third party property damage caused by the insured person||Coverage for accidental damages due to natural or man-made calamities|
|No coverage in case of accidental damages to the insured vehicle due to fire or theft||Coverage for losses due to fire, total loss, and theft|
|No option to include add-on covers||Option to include valuable add-on covers|
To protect you from third-party losses and damages/losses to the insured commercial vehicle caused due to an accident, floods, theft, riots, etc., it is crucial that you choose the Comprehensive Insurance Plan for wide-ranging benefits. It also lets you include add-on covers for robust insurance coverage.
A detailed list of exclusions will be available in the commercial car insurance policy. If you are unsure about the list, you can get in touch with our support team.
What is Commercial Car/Taxi Insurance?
The insurance bought for the purpose of covering a commercial car/taxi is known as commercial car/taxi insurance. These vehicles are usually four-wheelers that can be either simple hatchback cars, sedans, or SUVs (Sports Utility Vehicles). They are commercially owned and are used to carry paid passengers from one place to another.
Any major damage caused to the commercial car can directly put the lives of its passengers at risk. Hence, it is imperative that the owner of a commercial vehicle car spend enough time purchasing a comprehensive insurance policy with extensive coverage. The insurance policy covers a commercial car/taxi against the types of damages that are mentioned above.
Commercial Car Insurance Price
The price of commercial car insurance depends on a number of factors. The owner can use an online commercial car insurance calculator to know the approximate price of insurance for commercial vehicles. Usually, the following factors play a vital role in determining the cost of a car insurance policy.
Type of Insurance Policy
The premium for Third-party policy is lower than the Comprehensive Policy. Usually, the wider the coverage, the higher the policy.
Deductibles are of two types – Mandatory deductibles and Voluntary deductibles. The higher the deductible amount at the time of claim settlement, the lesser the premium amount.
Insured Declared Value (IDV)
IDV is the approximate current market value of the car. The higher the IDV, the higher the premium amount and vice versa.
Insurers award you for not raising any car insurance claims during the policy period. This discount can go upto 50% for five consecutive claim-free years. The higher the No Claim Bonus discount, the lower the premium.
Make and Model of the Car
The make and model of the car and the year of manufacture of the commercial car also determine the premium amount of your commercial vehicle.
Third-party insurance policy rates are determined by the IRDAI based on the vehicle’s engine cubic capacity (cc). The higher the cc, the more the premium amount.
How to calculate commercial vehicle insurance premium?
Calculating the approximate insurance cost for commercial vehicles can be done via the commercial car insurance premium calculator. It is an online tool to find out the insurance premium for commercial vehicles. Here is the process to calculate the insurance rate for commercial vehicles.
- Share details: Provide a few details of the vehicle, such as vehicle model, purchase date, and previous policy.
- Customise features: Choose the type of insurance plan, customise the plan with required add-on covers.
- Find out the premium: Once you have selected the type of plan and customise the plan with add-ons, click on calculate to find the insurance cost for the commercial vehicle.
You can also buy commercial car insurance online for a brand new vehicle at ACKO. Simply provide your personal and vehicle details, and our support team will customise a quote for your vehicle. You can then review and purchase the plan online.
Process to renew commercial vehicle insurance plan
The process for online commercial vehicle insurance renewal at ACKO is a hassle-free experience without any paperwork. Here are the steps for commercial car insurance renewal.
For existing MMFS customers:
- Step 1: Contact us on WhatsApp or Call on +917020646038 .
- Step 2: Select your best plan for your commercial vehicle and click on ‘Accept’.
- Step 3: Pay the premium and receive the policy document through email.
For new customers:
- Step 1: Contact us on WhatsApp or Call on +917020646038 .
- Step 2: Provide a few details of your commercial vehicle and previous policy (if available).
- Step 3: Select the plan, pay the premium and get your policy document instantly through email.
Things to Consider While Buying/Renewing Commercial Vehicle Insurance
Here is the list of factors to consider before buying insurance for your commercial car.
1. Consider your requirements and compare available plans.
2. Check the quality of services offered by the insurance company.
3. Check the claim settlement ratio of the insurer.
4. Check the coverage, inclusions, exclusions, terms and conditions.
5. Use an insurance premium calculator to buy a policy that is high on benefits, but low on costs.