How does commercial truck insurance work?

Published By: LogiPe on August 16, 2022

Caption: Trucks on the road face a range of risks. Suitable insurance helps mitigate these risks.

[Source: https://www.freepik.com/photos/big-truck Big truck photo created by wirestock -www.freepik.com]

What is commercial truck insurance?

Trucks carrying goods across long distances run into a variety of risks. These include accidents, environmental hazards, and theft. A complete commercial truck insurance policy can safeguard against the various threats faced on the way. Commercial truck insurance can thus protect against sudden unexpected costs faced by truck fleet managers and logistics firms.

How does truck insurance work in India?

Legality of truck insurance in India

Commercial truck insurance is required in India. As a minimum, a third-party liability policy is mandatory. Any vehicle not insured is violating laws. Authorities can prevent such vehicles from travelling between states. Further, owners of uninsured trucks will have to pay hefty fines for not following the law. The uninsured vehicles can even be seized. Overall, not insuring a commercial vehicle is an excessive risk that any owner must avoid.

Obtaining truck insurance in India

Fortunately, the process of obtaining commercial vehicle insurance is simple in India. The prospective vehicle owner has to follow the given steps:

Examine the vehicle/fleet status, and decide the coverage it needs.
Compare various plans for commercial vehicle insurance.
Submit an application to an insurance firm with all required documents

Once we complete the above steps, the vehicle has an insurance policy that the owner must regularly renew to stay valid. The cost of the premium for the policy varies depending on the vehicle's status, such as age, wear and tear and insured declared value (IDV), coverage, and no-claim bonuses. The policy is maintained with regular commercial insurance payments.

How to file a claim under commercial vehicle insurance?

Unforeseen incidents can lead to damage to the truck, its cargo or the driver. In such a case, the owner can file a claim. This claim should be covered as an inclusion in the company. Otherwise, the firm will not reimburse the claim. In case of a valid claim, the owner has to go through the following steps.

Fill in a claim form online with the insurance service provider.
State details such as
- Date and time of loss
- Brief description of the incident
- Policy details for reference
- Any relevant contact details
- Submit required documents as indicated below.

The following documents are required for substantiating an insurance claim:

Registration certificate of vehicle
Claim form
Copy of FIR in context of the accident
Load challan and route permit for the vehicle
Identification: Aadhar card, driving license
Tax receipt
Original policy papers

Once the claimant files the paperwork, the insurance company follows up on the claim. The operatives of the company verify the loss or damage. They then estimate the money due to be paid in compensation. If applicable, the vehicle can be towed away and repaired. Finally, the truck is returned to the owner after completion of the due processes.

Features of commercial truck insurance

Commercial truck insurance policies vary in their coverage. In general, we can say there are two broad categories:

Third-Party Liability Policy:
These policies are the minimum for any motor vehicle in India. Such policies cover any damage or loss caused to third parties due to accidents involving the insured client. Such policies do not cover losses/damage to trucks due to other factors.
Comprehensive Commercial Truck Insurance Policy:
This type of policy is broader in scope than Third Party Liability policies. In addition to the coverage offered by third-party liability policies, comprehensive insurance policies also cover situations of natural hazards, accidental property damage and theft.

What are the inclusions of a comprehensive commercial truck insurance policy?

Inclusions are the situations where the owner can make claims under the insurance policy. For a comprehensive commercial vehicle insurance policy, the following cases fall under inclusions:

Damage to cargo due to accidents
Fire/explosion
Lightning strikes
Weather abnormalities like floods, cyclones, and storms
Riots
Natural disasters like earthquakes, landslides, and rockslides
Accidental injury/death of the driver
Third-party liability: Damage caused to a third party due to accidents involving the client
Theft of goods in transit
Theft/loss of vehicle

Some of these inclusions, such as theft coverage, are optional and must be separately opted-in while picking the policy.

Exclusions include the range of scenarios not covered by the insurance policy. These include:

Inebriated driving
Unauthorized driver using the vehicle
Damage due to natural wear and tear of the vehicle
Accidents while driving with an invalid license
Damage during war times
Secondary losses arising from the initial damage
Having a lapsed policy at the time of the accident

Why is commercial truck insurance vital?

Commercial truck insurance ensures that any vehicle on the fleet is adequately covered against any eventualities. It also ensures that the owner is compliant with laws and regulations. In case of unforeseen incidents, truck insurance helps in damage control. The reimbursement of claims helps minimize monetary losses. It is a mandatory necessity to have commercial vehicle insurance for any registered vehicle in India.

How does LogiPe help manage commercial vehicle insurance?

LogiPe provides free insurance to drivers in a commercial fleet. Besides insurance, we offer a range of financial solutions for fleet owners and managers including FASTag and expense management using prepaid cards for fleet owners and drivers by LogiPe. We help enable the smooth reconciliation of transactions and provide quick sourcing of funds.