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What Does the Package Commercial Car Insurance Policy Offer?

Before reading the inclusions, exclusions and addons that you should focus on before buying a commercial car insurance policy, understand the below terminologies that will help you to understand the process easily.

Difficult Terminologies Explained

 
Legal liability (as applicable to commercial vehicles [taxis] excluding goods carrying and buses)
  • Legal liability to non fare-paying passengers other than statutory liability (except the Fatal Accidents Act, 1855)
  • Legal liability to non fare-paying passengers who are not employees of the insured
  • Legal liability to fare-paying passengers excluding liability for accidents to employees of the insured arising out of and in the course of their employment
  • Legal liability to paid driver and/or conductor and/or cleaner employed in connection with the operation of the motor vehicle
 
EMI cover (this add-on cover is applicable only if it is mentioned in the policy schedule)
  • The company will indemnify the insured to pay, on occurrence of the covered event (if as a result of an accident to the insured’s vehicle, the vehicle is required to be kept in any of the company’s authorized garages for repairs of more than 30 consecutive days) EMI amount(s) falling due in respect of the auto loan, subject to maximum sum insured.
 
Daily allowance (garage cash) benefit (this add-on cover is applicable only if it is mentioned in the policy schedule)
  • The company will make an allowance to the insured for loss of use of the insured vehicle due to risks covered in the policy schedule, up to a maximum of seven days.
 
No-claim bonus (NCB) protection
  • The insured will be entitled to NCB as per the policy schedule, up to a maximum of 50 per cent, in spite of claims made on the policy (maximum of not more than three claims on the policy).
 
Nil depreciation
  • The company undertakes to deduct no amount for depreciation in case parts are replaced on account of damage to the vehicle insured and/or to its accessories (shall be applicable to the first two [2] claims during the policy period and any subsequent claim[s] shall be subject to a deduction for depreciation at the rates mentioned in the policy terms and conditions).

 

Insurance cover for third-party liability Explained

Liability is covered for an unlimited amount in respect of death or injury and damage to third-party property, for Rs 750,000 for commercial vehicles and Rs 100,000 for scooters/motorcycles. 

 
Cover for loss or damage to Commercial Vehicle or Taxi

Insurance is provided for loss or damage to the vehicle and its accessories caused due to

  • Fire, explosion, self-ignition or lightning
  • Burglary, house-breaking or theft
  • Riot or strike
  • Malicious act
  • Terrorist act
  • Earthquake damage (fire and shock)
  • Flood, typhoon, hurricane, storm, tempest, inundation, cyclone and hailstorm
  • Accidental external means
  • While in transit by road, rail, inland, waterway, lift, elevator or air
  • By landslide/rockslide
 
Towing facility for disabled vehicle

The policy pays for towing charges from the place of accident to the workshop, up to a maximum limit of Rs 300 for scooters/motorcycles and Rs 1,500 for cars and commercial vehicles. 

 

Add-On Covers for Taxi or Commercial Vehicle

The following additional covers are offered as optional (on payment of additional premium) by various insurance companies:

  • Personal accident cover for owner driver
  • Personal accident cover for paid driver
  • Personal accident cover for passengers
  • Cover for lamps, tyres/tubes, mudguards, bonnet, bumpers
  • Electrical/Electronic accessories
  • Legal liability to paid driver
  • Legal liability to passengers
  • CNG/LPG kit
  • EMI cover
  • Daily allowance benefit
  • No-claims bonus (NCB) protection
  • Zero depreciation

 

Major Exclusions from the Taxi or Commercial Vehicle Insurance Policy

  1. Any accidental loss or damage and/or liability caused, sustained or incurred outside the geographical area
  2. Any claim arising out of any contractual liability
  3. Any accidental loss/damage and/or liability caused, sustained or incurred whilst the vehicle insured herein is
    • being used otherwise than in accordance with the ‘limitations as to use’, or
    • being driven by or is for the purpose of being driven by him/her in the charge of any person other than a driver as stated in the driver’s clause
    • Any accidental loss or damage to any property whatsoever or any loss or expense whatsoever resulting or arising there-from or any consequential loss
    • Any liability of whatsoever nature directly or indirectly caused by or contributed to by or arising from ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel (combustion to include any self-sustaining process of nuclear fission)
  4. Any accidental loss/damage or liability, directly or indirectly caused by or contributed to by or arising from nuclear weapons material
  5. Any accidental loss/damage liability directly or indirectly or proximately or remotely occasioned by/contributed to/by or traceable to or arising out of or in connection with war, invasion, the act of foreign enemies, hostilities or war-like operations (whether before or after declaration of war), civil war, mutiny, rebellion, military or usurped power, or by any direct or indirect consequence of any of the said occurrences
 
Government may soon cap life of commercial vehicles at 20 years

Effective 2020, the Centre’s vehicle-scrapping policy may become compulsory for all commercial vehicles and their life will be capped at 20 years. There is also a plan to get the GST Council to consider a lower tax on new commercial vehicles bought against a scrapped one, from the current GST rate of 28 per cent to 12–18 per cent.

Vehicle manufacturers may also offer a discount on purchases against scrapped vehicles.

Once the Cabinet approves the schemea and till the deadline of 2020 kicks in, owners of vehicles older than 20 years can voluntarily scrap their commercial vehicles and receive a discount on the purchase of new ones.

India has nearly 700,000 trucks, buses and taxis that were manufactured before 31 December 2000 and these contribute about 15–20 per cent of vehicular pollution (AT Kearney-CPCB-Union Road Ministry on emission norms). The Government expects 350,000 vehicles to be scrapped in the next two to three years.

The steel ministry along with NITI Aayog has been directed to draft a policy to promote establishment of recycling and shredding centres.

 

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