Commercial vehicles Package policy

Commercial vehicles are used for transportation of goods or passengers or both. It is a comprehensive insurance policy which covers the liability to third Parties including property damage and also the loss or damage to the vehicle insured. Commercial Vehicles are classified into

A) Goods carrying vehicles.
B) Passenger carrying Vehicles. I.e. motorized rickshaws, Taxis, Buses
C) Miscellaneous class of vehicles such as Tractors, Cranes and Trailers etc.

Scope of Cover
1. Accidental loss or damage to the vehicle due to:
Fire, lightning, self-ignition, external explosion, burglary, housebreaking or theft, malicious act,
Riot and strike, terrorism, earthquake, flood, cyclone and inundation .Whilst in transit by rail, road, air.
2. Liability cover (as Per M.V Act) to:
Third party injury or death
Third party property damage

Personal Accident Cover to Owner - Driver: This cover is to be taken mandatorily by all individual vehicle owners. Coverage to vehicle owner-driver in case of injury or death from a road accident compensates the insured by Rs. 15,00,000/-. However, with effect from 1st Jan 2019, the Insured will not have to purchase separate compulsory personal accident (CPA) cover for every new vehicle they purchase. He can buy one separate policy of Rs. 15 lakhs from any Insurer which will be valid for all vehicles owned by him. In case of Permanent total disability :
a) Loss of 2 limbs or 2 eyes or 1Limb or 1 eye -100% total Sum assured.
b) Loss of sight of 1 eye or 1 Limb- 50% total Sum assured.

Sum Insured – Insurance Declared Value (IDV)
IDV is calculated as manufacturer's listed selling price minus depreciation. The registration and insurance cost are excluded from IDV. The IDV of the accessories which are not factory fitted, are calculated separately at extra cost if insurance is required for them,
The term ‘IDV’ refers to the maximum claim Insurer will pay if vehicle is damaged beyond repair or is stolen. For vehicles above five years of age, the Sum Insured or IDV is mutually agreed value.

A) Premium for Liability Cover: IRDA will notify Premium rates applicable every year
B) Premium for Own damage (OD)
Rates are applied on the IDV of the vehicle .

Goods Carrying Vehicles (Public Carrier) Own damage Premium rates vary according to
a) Age of the vehicle.
b) Zones i.e. A, B & C
Zone A: Chennai, Delhi, Kolkata, Mumbai
Zone B: All other State Capitals
Zone C: Rest of India
The rates provided are applied for vehicles with Gross vehicle Weight (GVW) not exceeding 12,000kgs. For vehicles exceeding 12000kgs, additional Premium for each 100kgs is applied on IDV of the vehicle. Rates are higher for age and Zone B & C.
Four wheeled Vehicles (Passengers for Hire)
For taxis Own damage cover for rates of Premium vary according to
A) Age of the vehicle- Up to 5 years, between, 5 & 7 Years and exceeding 7 years
B) CC up to 1000, between 1000 & 1500 and exceeding 1500 CC
C) Zone A & B

For Own damage cover for rates of Premium vary according to
A) Age of the vehicle as for Taxis
B) Maximum Licensed carrying Capacity.
(i) Not exceeding 18 Passengers.
ii) Exceeding 18 and not exceeding 36 Passengers.
C) Zones i.e. A, B&C
Zone A: Chennai, Delhi, Kolkata, Mumbai
Zone B: All other State Capitals
Zone C: Rest of India.
Insurers allow Discount on Own damage Premium depending on their Incurred Claims ratio which vary from Insurer to Insurer and also type of vehicle.

Add on covers

Loss or damage to electrical accessories

Loss or damage to Non-electrical accessories

Personal Accident cover for insured or any named person or unnamed passengers

Legal liability to Persons employees (paid drivers/cleaners).

IMT 23: Normally, for commercial vehicles, coverage for lamps, tubes, tyres, bumpers etc is excluded. If one opts for IMT 23, the exclusion will be deleted.

Nil Depreciation Cover: If one opts for nil depreciation cover, depreciation will not deducted in case of partial loss claims .i.e. Entire claim amount will be reimbursed deducting Policy excess and salvage. If you want to take nil depreciation cover for commercial vehicles you need to opt for IMT 23 first


Wear and tear, breakdowns.

Consequential loss

Loss when driving with invalid driving license or under the influence of alcohol.

Loss due to war, civil war, Nuclear perils etc.

Claims arising out of contractual liability.

Use of vehicle otherwise than in accordance with 'limitations as to use' (e.g. private car being used as a taxi)

Mechanical and electrical breakdown; failure or breakage.