Variables that Impact the Commercial Vehicle Insurance Premium

Your vehicle’s Insured Declared Value, Engine capacity, Geographical location and the purpose of driving influence the commercial vehicle premium amount. Commercial auto coverage usually is more expensive because higher liability risk is involved and property damage claims when transporting goods or people. Any add-on cover availed further increases the premium.

When buying insurance for a vehicle, the premium is an essential factor to be considered.  However, it differs from one insurer to another and depends on multiple factors. If you own a commercial vehicle owner, it is imperative for you to know what goes into determining the commercial vehicle insurance premium and some of the major factors that influence it are given below.

  • Insured declared value- IDV in simple words refers to the market value of your commercial vehicle. The higher the IDV, the greater is the premium amount. The market value of a new vehicle is also high and so is the premium.
  • Engine size- Your commercial vehicle’s engine size is measured in cubic capacity. When determining insurance premiums cubic capacity of the engine fitted in your vehicle plays an important role. Vehicles with a bigger engine size command higher premium in comparison to those with lower ones. The reason being that big engine vehicles are expensive and are more prone to accidents, thus the drastic increase in the premium.
  • Purpose of vehicle- Whether the vehicle is being driven for personal or commercial use that also is an important determining factor.
  • Geographical location- The city where your vehicle is registered or is being used for transit that also helps in determining the premium. If the area is prone to accidents or thefts the commercial vehicle insurance premium will be on the higher side.
  • Add-on covers- It is possible to customize your commercial motor insurance policy with additional coverage features. All the motor insurance companies in India offer these add-on benefits to enhance the policy coverage benefits as per the customer’s needs and preferences.

The insured can opt for these add-on covers or optional benefits at the time of policy purchase and renewal. These additional covers can be availed with the existing policy by paying an extra amount of premium. One can easily compare commercial vehicle insurance quotes online based on the add-on covers and choose the most adequate one.

Here are some of the most common add-on benefits that are provided by most of the motor insurance companies in India -

Zero Depreciation Cover

The insured gets the total cost of repair for the damage or loss incurred to the insured vehicle. The depreciation value of the damaged parts or parts replaced is usually deducted at the time of claim settlement, but with ‘zero-dep’ policy one can claim the full amount. Usually, it is applicable to vehicles that are less than 5 years of age. It can be availed twice during a policy term.

Key Replacement Cover

In case the vehicle keys are locked inside the vehicle or are stolen then the cost of changing the keys will be borne by the insurer.

Emergency Roadside Assistance

Immediate help is provided by the insurer, in case there is a breakdown of the insured vehicle in the middle of the road. Services include - towing assistance, change of flat tyre, refuelling, and jump-starting the battery among others. Some insurers also provide emergency accommodation when an emergency strikes.

No-Claim-Bonus Protection

The policyholder is entitled to a No Claim Bonus (NCB) on motor insurance premium for all the years that he/she has not made any claim. Up to 50% of No Claim Discount can be earned during a policy term. If a claim is made, then this NCB is not accrued to the insured’s account. But with NCB protection cover, it is secured with insurer even after making a claim.

  • Return to Invoice: With this add-on cover, the claim amount is not calculated on the basis of the IDV. It is decided based on the price of the insured vehicle at the time of purchase.
  • Personal Belongings Cover: The loss or damage caused to the insured’s personal belongings during the accident is reimbursed by the insurer if one opts for this benefit.
  • Consumables Cover: Some insurers also provide coverage for repair and replacement of car nuts and bolts, screw, oil etc. For high-end and heavy commercial vehicle owners, this one proves to be really helpful.
  • Engine Secure: It also covers the non-accidental damages to a vehicle’s engine. For high-end automobiles, it is useful during the time of water logging, or at places where the rainfall is more than usual, this add-on becomes quite essential.
  • Vehicle Hire Service: In case there is a loss or damage caused to the insured vehicle, and it is sent for repair, the insurer will provide a vehicle on hire for emergency purposes. There is a specified limit to this clause, which may vary from insurer to insurer.
  • Daily Allowance Benefit: Some motor insurance companies provide this add-on benefit. By opting for this add-on benefit, the insured can get daily transport expenses till the insured commercial vehicle is repaired.

Wrapping it up!

To avoid paying a higher premium cost, it is advisable that you compare multiple commercial vehicle insurance quotes based on their coverage, premium, deductibles, and additional covers. Once satisfied, you can zero down on one policy and the insurer. This will help you select the policy with insurance premium within your budget.

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