Difference Between Private and Commercial Auto Insurance

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A car is above all an investment. Whatever the model and the price, whether used or first-hand, a car is an asset. The most effective way to protect your car is to purchase car insurance from day one. Depending on your usage, you can purchase auto insurance accordingly. Car insurance for a commercial vehicle and a private vehicle is different.

A commercial vehicle is used primarily in a business to make a profit, while a private vehicle is used for personal purposes. Let’s take a look at the types of auto insurance.

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Types of auto insurance

There are 2 main types of car insurance available in India.

  1. Motor vehicle liability insurance – Mandatory by law, motor vehicle liability insurance protects property and covers damage to the third party involved in the accident. This does not cover the costs of damage to your vehicle. The third party premium is less but the amount you end up paying to repair your vehicle in the event of an accident is much higher. There are no options you can purchase to tailor this font to your needs.

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  1. Comprehensive auto insurance – A robust type of insurance policy, comprehensive auto insurance is when your vehicle, as well as the third party’s vehicle as well as the driver and passengers can be covered under one policy. You can enhance the protection extended to your car by purchasing other add-ons such as zero depreciation, roadside assistance, consumables coverage, etc. You can customize the IDV in this type of auto insurance.


What is private auto insurance?

When you buy a car, you must declare the intended use of the car. Cars registered for private use have a white license plate with black characters on it. Private auto insurance is issued to cars intended for personal use and cannot be used to transport people or goods from place to place. This kind of car insurance covers third party vehicle damage, theft, fire, riots, accidents, strikes, floods and earthquakes depending on the type of auto insurance purchased. Simply put, car insurance that can be purchased by passenger cars is known as private car insurance.

What is commercial auto insurance?

Cars used for business purposes can be used to transport people or goods. Commercial auto insurance is usually issued for taxis or taxis that transport people for cash. Commercial automobile insurance covers its own damages as well as the obligations of third parties due to property damage or personal injury and death. Apart from the things that are also seen in private auto insurance, this also provides coverage to the employee or paid driver. You can buy taxi insurance online easily by searching for the best deal and searching the net for the perfect match. Many insurance companies offer this service online, making it easier for business owners to make decisions that affect their financial resources. Commercial auto insurance is essential for business owners because a single accident can cost them a fortune and bring the business down.

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Difference Between Private and Commercial Motor Insurance in Tabular Form

Private car insurance

Commercial auto insurance

The frequency of use of a private car is much less. It also means that the risk is less and the premium is much lower.

A commercial car can drive around 10 to 12 hours a day. This means that the risk is greater and the premium for commercial auto insurance is higher.

By law, passenger cars must at least be covered by liability insurance.

By law, a commercial vehicle must have legal liability coverage for employed drivers as well as accident coverage for passengers.

This car insurance provides coverage in the event of a personal accident to the owner or driver of the car resulting in death or disability.

Commercial auto insurance provides personal accident coverage for passengers and employed drivers. It protects the car owner from financial liability due to accidents.

Private auto insurance does not cover damage caused while towing the car.

Commercial auto insurance covers loss or damage caused while towing the car to a garage.

The documents required by a private car to submit when filing a claim are the RC, driver’s license and tax records.

The documents required to register a claim in case of commercial motor insurance are the vehicle license, the load certificate, the roadmap, the certificate of fitness, the copy of the FIR as well as the RC of the car, the license driving and tax records.

Can I convert commercial auto insurance to private auto insurance?

If you plan to use it only for personal reasons, the car can be converted from a utility vehicle to a private vehicle. This requires a process that involves re-registering the car at the local RTO. Once the car has been converted to a private car, only then can you convert commercial car insurance to private car insurance.

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Although there are some marked differences between private and commercial auto insurance policies, the underlying objective is to protect the car and the driver as well as the passengers from serious injury.

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