Auto Rickshaw Insurance

Auto rickshaw insurance comes under the category of commercial vehicle insurance. This insurance policy is designed to provide financial coverage to auto-rickshaw owners in India. As per the Motor vehicle Act 1988, all auto rickshaw owners must protect their vehicle under third-party auto-rickshaw insurance however, it is up to them whether they want to purchase the comprehensive insurance policy to get coverage for their own damages caused due to accidents, natural calamity, fire, etc.

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Importance of Auto Rickshaw Insurance

Auto-rickshaws are one of the most utilized modes of public transportation. As their run time is more than any other vehicle type, the auto-rickshaw owner needs to protect it with an insurance policy. Purchasing insurance can take away a huge financial burden off of the policyholder’s shoulders in case of loss or damage.

Not just the driver/owner of the auto-rickshaw but it provides cover for the passengers as well. With auto-rickshaw insurance, the policyholder can stay tension-free and able to earn without spending much on its maintenance. However, it depends on the auto-rickshaw owner to purchase just third-party liability insurance or a comprehensive as well.

Since it is mandatory to purchase a third-party liability insurance policy for a vehicle owner in India as per Motor Vehicle Act, 1988. It is recommended to vehicle owners purchase a separate comprehensive insurance plan also.

It is because third-party insurance only covers third-party expenses and a comprehensive insurance policy provides overall coverage to the policyholder. So, let us now tell you what is covered under auto-rickshaw insurance and what is not?

Reasons to Buy Auto Rickshaw Insurance

Below are the reasons, which will help one to comprehend and buy auto-rickshaw insurance:

  • In case, if an organization owns an auto-rickshaw for the business, then under such a situation, the organization needs to buy third-party auto rickshaw insurance as it is a legal mandate. Under any uneventful situation, if the auto-rickshaw causes damage or loss to any third-party person, property, or vehicle, then under such a perilous situation having this cover will take care of the finances incurred and not hamper the operation of the business.
  • Apart from buying third-party insurance, it is better to buy a comprehensive auto-rickshaw insurance plan specifically when the auto-rickshaw is used daily and is an integral part of the business. Comprehensive auto-rickshaw insurance will secure the auto and the owner-driver from any damage/loss, which may be caused due to any natural calamity, man-made calamity, any malevolent act, and so forth.
  • As a social responsibility, correct auto-rickshaw insurance is required as it ensures the safety of the passengers and the business. Moreover, it depicts the seriousness and importance of the work.
  • In the world of actualities, eventualities do not come knocking. In unfortunate circumstances, if the business does face any unexpected loss then one may spend the hard-earned money and valued time on other facets of the running business.
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Auto Rickshaw Insurance: Inclusions

The insurance policies come with a different set of insurance coverages. Comprehensive auto-rickshaw insurance provides cover to the policyholder as well as the passenger travelling in the auto. Apart from this, It provides cover for bodily injuries, theft, natural calamity, etc.

Apart from this, many commercial vehicle insurance companies provide cashless claim facilities to the policyholder at their network garages. You can also customize the insurance plan as per your requirements.

Here is the coverage provided by this insurance policy.

Accidental Loss & Damages

This insurance policy provides financial cover for any kind of damage or loss caused to the auto in an accident while transporting the passengers.

Natural Disasters

This insurance policy provides cover for any kind of natural calamities like typhoons, floods, earthquakes, etc. during which the auto-rickshaw has suffered any damage or loss.

Theft

Since auto-rickshaws are open and do not have entry doors make they are much more prone to theft. This insurance policy provides cover in case someone steals the auto-rickshaw. It is recommended to consult with your insurer if the policy provides cover for theft or not.

Fire Accidents

When a vehicle gets old the engine’s condition starts getting worse and if not taken care of properly the engine can heat up to an extent that it can burn up during a ride. Since fire accidents are one of the most unpredictable causes of damage, this insurance policy provides cover for it as well.

Third-Party Losses

As mentioned above, it is mandatory to purchase a third-party commercial vehicle insurance policy as it provides cover for the loss of a third-party caused by the auto-rickshaw.

Towing Disable Auto-Rickshaw

The insurance policy protects the auto-rickshaw if it incurs any loss or damage while it is being towed away by a towing truck.

Personal Accident

If the policyholder either a driver or the owner injures himself while riding the auto-rickshaw or even the passenger, the insurance policy provides cover for any partial/permanent injury. The plan will cover the expenses incurred in the treatment of that injury.

Auto Rickshaw Insurance: Exclusions

When you are purchasing an insurance policy, it is as important to know what it does not cover as it is important to know what it covers. The inclusions and exclusions of an insurance plan vary from plan to plan.

This is what the Auto-rickshaw insurance policy does not cover.

Driving Auto-Rickshaw Without Valid License

It is already illegal to drive without a valid license on Indian roads. In case the insurance company finds out that the driver was driving the auto without a valid license at the time of the road accident then they will not provide cover for any kind of loss or damage.

Driving Under The Influence Of Alcohol

If the insurance company finds out that the auto-rickshaw driver was drunk driving at the time of the accident then they will not provide cover for any kind of loss or damage. Also, it is not allowed under the Motor vehicle Act of India to drink and drive and the driver can attract heavy traffic fines.

Loss Out Of Negligence

The insurance company will not provide cover for any kind of loss or damage if the driver neglects any natural calamity or bad engine condition and still goes on to ride the auto-rickshaw and suffers serious damage.

Consequential Loss

If the auto-rickshaw has been damaged indirectly and not a direct result of fire, road accident, or natural calamity, the insurance company will not provide cover for such incidents.

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Add-On Available for Better Coverage

The insurance companies do not limit their insurance plans with a specific set of coverage. They also provide add-on covers that you can purchase separately. You can ask your insurer about the add-on covers available and add them as per your requirement. You should also know that if you have included any other rider (Add-on) cover then the premium rates of the plans will also increase.

Here are the add-on covers that you can consider purchasing:

  • The insurance companies provide roadside assistance cover in case the auto-rickshaw gets stuck while riding on the road. You can ask your insurer if they provide this add-on cover or not.
  • You can also get coverage of the auto-rickshaw in case the auto-rickshaw faces any damage during the transportation of passengers.

Road accidents are inevitable and protecting your vehicle with insurance is a smart move. Once your purchase insurance and the vehicle meets an unforeseen accident then you should also know about the insurance claiming process.

The policyholder can raise a claim either online or offline. Also, read your insurance plan wording if your plan provides cover for that particular loss or not. If your insurance plan does cover that particular loss then you need to provide your insurer with the following details:

  • First of all, tell them about the time, date, and place of the accident.
  • Your policy name and number for reference
  • You also need to tell them how the accident took place.
  • Tell them your name and contact number.

Once you are done with this, you need to provide them with some of the documents.

Factors Affecting Auto Rickshaw Insurance Premium

Before purchasing an auto rickshaw insurance policy for your three-wheeler, you must be aware of the factors affecting its premium. These factors include:

Engine Capacity

The engine capacity of your commercial vehicle is of utmost importance when ascertaining the premium of an auto insurance policy. The higher the engine's cubic capacity, the higher the risks involved in insuring it. This is because commercial vehicles with a higher engine capacity are more prone to unforeseen accidents on road, thus increasing the liability of the insurer.

Insured Declared Value

IDV or Insured Declared Value of a commercial vehicle is another important factor that is considered while determining the price of an auto-rickshaw insurance policy. An IDV of a vehicle is the amount that you get when there is a total loss of the insured vehicle. This value is calculated after deducting the depreciation of the vehicle and accessories from the current market value of the vehicle.

A higher IDV means your premium will increase as you will be getting more during the time of claim. While a lower IDV means a lesser premium and lesser payout at the time of claim.

Geographical Location

The geographical location where your auto-rickshaw has been registered is also used to calculate the premium of your auto insurance policy. The premium is calculated based on Zone A cities and Zone B cities. While the cities in Zone A include prominent metro cities like Delhi, Chennai, Bangalore, Pune, Hyderabad, Mumbai and Ahmedabad, Zone B cities consist of the rest of India.

Since the risk of accidents is more due to dense traffic in Zone A cities, vehicles registered in this zone carry a higher premium as compared to Zone B cities, where the risk of accident is comparatively less.

Additional Covers

Additional covers are optional add-ons that can be purchased to enhance the coverage of a standard auto rickshaw insurance policy. These add-ons carry an extra premium amount.

Thus, the higher the number of add-ons you add to your commercial vehicle insurance policy, the higher will be the premium you will be paying and vice versa.

Safety Devices

If you have installed an ARAI-approved anti-theft device in your auto-rickshaw, the premium of your insurance policy is likely to be less. Most insurers give a certain discount to vehicle owners who have installed an anti-theft device. The installation of an anti-theft device increases the security of the vehicle, reducing the insurer's liability and thus the premium amount.

However, these anti-theft devices must be approved by the Automobiles Research Association of India (ARAI).

Apart from these factors, you must also compare auto-rickshaw insurance plans of top commercial vehicle insurance companies online and then choose the plan that offers you the required coverage and premium.

Who can Purchase Auto Rickshaw Insurance?

Well, there are two types of people who can opt for auto rickshaw insurance. If you run a business and own multiple auto-rickshaws that you lend to other drivers on rent then you can purchase this policy. Apart from this, if you can afford to purchase an auto-rickshaw in order to make a living out of the earning you make by providing transportation service then it is recommended to you to purchase this policy as it can help you save a lot.

So, if you run a business or own an auto-rickshaw then you must purchase this insurance policy. Now let us tell you why you should purchase this insurance policy?

Documents Required to Start The Claiming Process

In order to raise a claim for any loss or damage caused to the auto-rickshaw, you need to provide these documents to your insurer.

  • Vehicle Registration Certificate
  • Driving License
  • Pollution Under Control Certificate
  • Copy Of FIR
  • Insurance policy papers
  • Aadhar card copy
  • Filled claim form
  • Tax paid receipt
  • Newspaper cutting if printed in any newspaper as a proof

The insurance companies provide some other benefits to the policyholder. Let us tell you about one such benefit that you can avail of.

No Claim Bonus Feature

For the policyholder who does not raise a claim in a year, the insurance company provides them this benefit. The company provides discounts or additional benefits to the policyholder as per the IRDAI norms as they set a specific percentage of the benefit that the policyholder gets as either a discount on their consecutive year’s premium rate or discount on a purchase of a rider (Add-on).

You can check the no claim bonus percentage set by the IRDAI in the below table:

Duration Without Raising Claim Percentage of NCB
1 year 20%
2 consecutive years 25%
3 consecutive years 35%
4 consecutive years 45%
5 consecutive years 50%

Also, the insurer will not provide NCB benefits to the policyholder under two conditions.

  • The first and most important is if the policyholder raises a claim in the first year.
  • If the policyholder does not renew the policy that is within 90 days of expiration.

If you run a business or transportation company with multiple auto-rickshaws or personally purchased the auto-rickshaw to earn for yourself and your family then an auto-rickshaw insurance policy can come in handy when nothing else will.

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Three Wheeler Insurance FAQ's

  • Ques: Who can purchase an auto-rickshaw insurance policy?

    Ans: If you have an auto-rickshaw that you use to earn money or run a business that uses auto-rickshaw. You can purchase this insurance policy.

  • Ques: Does this insurance company include the personal accident cover?

    Ans: Yes, this insurance policy includes the personal accident cover.

  • Ques: What is the benefit percentage for not raising a claim for one year?

    Ans: You can avail of 20% of benefits for not raising a claim for one year.

  • Ques: Who decides the kind of benefit policyholder will get for No claim bonus?

    Ans: The insurance company decides the kind of benefit a policyholder will get for not raising a claim for one year.

  • Ques: Does this insurance policy cover the loss or damage caused to the passenger of the auto-rickshaw?

    Ans: Yes, this insurance policy covers the loss or damage caused to the passengers of the auto-rickshaw.

  • Ques: Is it possible to get up to 50% of benefits under this policy?

    Ans: Yes, it is possible to get up to 50% of added benefits only if you do not raise a claim for 5 consecutive years.

  • Ques: Does the insurance company provide towing facility? If yes, then does it provide loss or damage caused to the auto-rickshaw while being towed away?

    Ans: Yes, the insurance companies do provide towing facilities in case the vehicle stops. The insurance company also provides cover for the loss or damage if the auto-rickshaw faces any damage or loss while being towed away.

  • Ques: Does the policy provide cover if any content of the vehicle is stolen?

    Ans: Yes, the insurance company provides cover if any of the content kept in the auto-rickshaw is stolen.

  • Ques: Does this policy provide cover for any of the modified part damage or loss?

    Ans: Yes, the insurance company will provide cover for any damage or loss caused to the modified part of the auto-rickshaw but the policyholder will have to inform the insurer about the modification and it will increase the premium rate of the plan.

  • Ques: Does the insurance company provide coverage for a total loss?

    Ans: Yes, the insurance company provides cover for the total loss only when the estimated damage expenditure is more than 70% of the sum insured.

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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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