Commercial vehicles carrying heavy goods are prone to accidents on-roads, given their size and load. Such unforeseen events can be very expensive and can lead to serious financial woes. So, if you own a commercial vehicle, it’s crucial that you purchase a commercial vehicle insurance plan to ensure that you’re protected on-road.
A commercial vehicle insurance plan can help you secure your vehicle, goods as well as your business against a whole range of unforeseen events and losses. This can include disasters, fires, thefts, etc.
Apart from offering you peace of mind and ensuring you’re protected on-road, commercial vehicle insurance serves another important function. It makes sure that you are on the right side of the law. The Motor Vehicles Act, 1988 mandates that all vehicles, including commercial vehicles must be insured against third-party liability. This helps mitigate any losses caused to third-parties.
When you drive your vehicle without third-party liability insurance, you may be penalised by the traffic police. Additionally, if you were to get into an accident that causes damages to third-parties, then you will have to pay compensation out of pocket. This can be a cumbersome and expensive procedure.
Simply purchasing a third-party liability insurance plan will make sure that you are financially protected in the event of any third-party damages. This also makes sure that the third-party is sufficiently compensated for the losses incurred.
While only third-party insurance is legally mandated, most vehicle owners choose to purchase a more comprehensive policy plan. This offers enhanced protection against a variety of events, circumstances and losses.
There are three types of commercial vehicle insurance coverages, namely – Third-Party Coverage, Own Damage Coverage and Comprehensive Coverage. Let’s take a closer look at each of these to understand them better.
- Third-Party Coverage
As per Section 146 of the Motor Vehicles Act, 1988, third-party coverage is mandatory. Third-party coverage extends to both opponent vehicle owners and pedestrians. Any damages caused to a third-party will be covered under this insurance plan. In case you get into an accident that causes damages to third-party property or person, then the insurer will take care of it.
- Own Damage Coverage
A own damage insurance plan covers damages caused to the insured’s vehicle by covered events. These damages can be resultant of accidents, thefts, natural calamities, man-made disasters, etc.
- Comprehensive Coverage
A comprehensive coverage plan offers protection against both third-party liabilities and own damages. Apart from this, many plans will also come with Compulsory Personal Accident (CPA) that protects the owner-driver against accidental injuries. You may also add your preferred riders to this plan to suit your needs.
Insurance premiums are an important part of any insurance plan. An insurance premium is the amount that is paid to the insurer by the policyholder to purchase the insurance plan. The insurance premium is dependent on a number of factors such as the plan you choose, the extent of coverage, vehicle’s value, etc. It’s important that you choose an insurance plan that’s affordable but also offers adequate protection.
Calculating your insurance premium is the first step towards understanding insurance premiums a little bit better. This will help you understand the premiums across various insurance providers. Calculating your insurance premium is simple and can be done online within a matter of minutes.
You may use a commercial vehicle insurance premium calculator to calculate your insurance premium amount. It is quite similar to a car insurance premium calculator. Go on an insurance premium calculator page, enter in basic details and you’ll receive a quote.
You can try tweaking the coverage to adjust your insurance premium. Now, you might be wondering- how is my insurance premium amount determined?
As you may have already guessed, a lot of things go into determining your insurance premium amount. Naturally, as the scope of your plan’s coverage increases so will your insurance premium. But, even apart from this, there are a few other factors that are carefully analysed to arrive at your commercial vehicle insurance premium. Here are some of these factors:
- Make and Model
Your vehicle’s make and model are primary determiners of commercial vehicle’s insurance premium. Expensive vehicle models have higher insurance premiums in comparison with their less expensive counterparts.
- Insured Declared Value
Insured Declared Value or IDV refers to the current market value of the insured vehicle. In other words, IDV is the maximum amount the insured is entitled to, in case the vehicle suffers a total, irreparable loss. The higher your IDV, the higher your insurance premium is likely to be.
- Type of Insurance Plan
The type of insurance plan you choose will have a significant impact on your insurance premium. A third-party liability insurance plan will be cheaper than a comprehensive cover as the scope of coverage differs greatly.
- Riders
Riders are additional covers that you can add to your basic insurance plan to enhance your plan’s coverage. Riders, of course, come at additional cost. So, if you add too many riders, then your insurance premium amount will shoot up. It’s best to analyse your needs and only purchase riders that you need!
Now that you have a clearer understanding of what goes into determining your insurance premium, you’re probably wondering how you can save on these premiums. Fret not, here are some simple steps you can take to reduce your commercial vehicle insurance premium:
- Choose your policy wisely
Choose a policy plan that offers adequate protection while falling within your budget. Get Your HGV Covered Today by selecting a plan that balances coverage and affordability. It makes little sense to purchase a policy plan that offers extensive coverage if it’s not something that you can afford. A good policy is one that you can renew on time without it burdening you financially.
- Be smart with your add-on choices
These days, there are a whole lot of add-ons available in the market. These add-ons can seem very attractive but it’s important that you clearly map out your requirements before making any purchase. Many of us end up purchasing unnecessary add-ons as they are cheaper in comparison to policy plans. However, these unnecessary purchases can pile up and cause your overall insurance premium to drive up.
- Understand deductibles
Deductibles are out-of-pocket expenses that you’ll be required to pay while making a claim. Plans with higher deductibles will generally have lower premiums and vice versa. While it might be tempting to choose a plan with high deductibles to save on premium, you might be well-advised to resist this temptation. Doing this can end up costing you in the future if you ever need to make a claim. The wise thing to do is to find a balance that works for you.
- Renew on time
An NCB or No Claim Bonus is awarded by insurers to policyholders who do not make any claims during a policy term. An NCB is generally offered as discounts on future renewals. These discounts can help you save greatly on your insurance renewals. However, NCBs can be claimed only on renewals that are made on time. If you fail to renew your plan on time, it’s likely that your NCB will be revoked.
While we’re on this topic, it’s worth noting that it’s always best to avoid making unnecessary and small claims. Making unnecessary claims will not only make you ineligible for NCBs but can also cause your premiums to increase in the future.
