Goods Carrying Vehicle Insurance Policy

Goods carrying vehicle insurance is essential for people involved in the transportation business to cover their good carrying vehicles like trucks, tempos, etc. against unforeseen events. They provide financial assistance to the policyholder to overcome any unforeseen losses or damages, including third party liabilities.

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What is a Goods Carrying Vehicle Insurance Policy?

A Goods Carrying Vehicle Insurance policy is a type of commercial vehicle insurance policy designed to protect commercial vehicles that carry goods from one place to another. It is a comprehensive insurance policy that covers any damages or losses incurred in an accident, natural calamity, fire incidents, theft, etc. It also provides coverage for any third party liabilities arising out of the insured goods carrying vehicles.

Types of Goods Carrying Vehicles in India

There are different types of goods carrying vehicles used in India. They are as follows:


Trucks are mostly used to transport bulk goods from one place to another. They are available in different shapes and sizes. While small trucks are used for daily transportation of goods within the same city, large trucks are used to carry big-sized and heavy goods, which may involve intercity travel. Business owners can opt for a truck insurance policy to cover trucks of all sizes.

Three-wheeler Tempos/ Cargo Autos

Three-wheeler tempos or cargo autos are often used to transport goods within short distances. They are small in size and are often used to deliver goods within the same city. Although they are less prone to accidents than trucks, still you can choose to purchase auto rickshaw insurance or a goods carrying insurance policy for tempos to ensure coverage for them.

Four-wheeler Tempos/ Pick Up Van

Four-wheeler tempos or pick up vans are smaller than trucks and bigger than three-wheeler tempos. These tempos are usually used to carry furniture and electrical appliances from one place to another within the same city. Business owners can cover such vehicles with pick up van insurance or a commercial vehicle insurance policy for tempos.

Tipper Vehicles

Tipper vehicles come under the heavy vehicle category and are mostly used to carry construction goods. They usually have to travel from one city to another, which makes them prone to breakdowns and accidents. However, such vehicles can be covered under a goods carrying insurance policy.


Trailers are bigger than trucks and are used to transport large-size goods, such as cars. They are often used to transport goods from one country to another, which makes them much more prone to accidents and breakdowns. However, commercial vehicle insurance can be purchased to financially protect trailers against uncertainties on the road.

Importance of Goods Carrying Vehicle Insurance

Goods carrying vehicles are the soul of a transportation business. Businesses cannot get raw materials or deliver goods in the absence of a commercial vehicle and any loss or damages to such vehicles can lead to major financial losses. Besides, the poor conditions of roads in India and the longer running time of such vehicles make them more prone to breakdowns and damage. 

Hence, it becomes the responsibility of business owners to protect their goods carrying vehicles with a commercial vehicle insurance. The policy protects the owner from the financial burden arising out of unforeseen damages or losses suffered by the goods carrying vehicle.

Types of Goods Carrying Vehicle Insurance

There are two types of goods carrying vehicle insurance plans available in India. They are:

  • Third Party Goods Carrying Vehicle Insurance – A third party insurance policy will cover the insured goods carrying vehicle from any accidental third party liabilities leading to bodily injuries or property damages to third parties. 
  • Comprehensive Goods Carrying Vehicle Insurance – A comprehensive insurance policy will provide coverage for both third party liabilities as well as own damages sustained by the goods carrying vehicle during an accident, natural calamity, fire, etc.

While a third-party policy will protect against the liabilities arising out of a third-party, a comprehensive insurance policy will provide overall protection to the policyholder. However, it depends on the business owner to decide if he wants to purchase a third-party liability insurance policy or a comprehensive insurance policy.

What is Covered Under Goods Carrying Vehicle Insurance?

Here are the coverage offered by a goods carrying vehicle insurance policy:

  • Accidents - Any loss or damage caused in an unforeseen accident while carrying the goods from one place to another
  • Theft - Loss or damages due to the theft of the vehicle with/without goods in them
  • Fire – Any loss or damages incurred due to unforeseen fire incidents
  • Natural Calamities – Damages or losses sustained due to calamities like earthquakes, floods, typhoons, etc. 
  • Manmade Disasters – Any loss or damages caused to the goods carrying vehicle in a manmade disaster, such as riots, strikes, etc.
  • Personal Accident Cover – Compensation for any accidental bodily injuries or death of the vehicle owner/driver while carrying the goods from one place to another
  • Third-party Liabilities - Any third-party physical injuries or property damages caused by the insured vehicle during a road accident
  • Towing Facility – Loss or damages sustained by the insured goods carrying vehicle while being towed.

What is Not Covered Under Goods Carrying Vehicle Insurance?

Here are some of the things that are not covered under a goods carrying insurance plan:

  • Drunk Driving - Loss or damages caused while the driver was driving the goods carrying vehicle under the influence of alcohol
  • Driving Without License - Any damage or loss occurred when the driver was transporting the goods without a valid driving license.
  • Consequential Loss -Any consequential loss caused to the goods carrying vehicle
  • Contributory Negligence Cover – Loss or damages caused to the insured commercial vehicle due to the negligence of the driver
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Goods Carrying Vehicle Insurance Add-On Covers

A goods carrying vehicle insurance policy also comes with add-on covers that can be purchased to ensure wider coverage for the vehicles. However, these add-ons also increase the premium rate of the insurance plan. Here are some of the add-on covers available under goods carrying vehicle insurance plans:

  • Road Assistance Cover: This add-on cover will provide roadside assistance in case the vehicle gets stuck somewhere on the road during the transportation of the goods.
  • Zero Depreciation Cover: This cover provides the full value of the vehicle without deducting depreciation in case of a claim.
  • Return to Invoice Cover: This cover provides the invoice value of the vehicle as the insured declared value (IDV) in case of a total loss or theft of the vehicle.
  • Tyre Protection Cover: This add-on cover will pay for any non-accidental damages to the tyre of the goods carrying vehicle with time.
  • Consumables Cover: This cover will pay for the consumables used while repairing or replacing any part of the insured vehicle.

How to Raise a Claim Under Goods Carrying Vehicle Insurance?

In order to raise the claim under the goods carrying vehicle insurance policy, it is necessary to inform the insurer about the loss or damage sustained by the insured vehicle in the mishap. The policyholder must provide the following details to the insurer at the time of raising a claim:

  • Tell them about the time, date and the location of the accident
  • Tell them the policy number for reference
  • Tell them how the accident took place
  • Provide the owner’s name and contact number

The insurance company will send a surveyor to assess the damages to the goods carrying vehicle. Based on the assessment report, the insurer will accept or reject the claim. Moreover, the policyholder also has to submit several documents to support the claim. Once the vehicle is repaired, the insurer will either settle the claim directly or pay the claim amount to the vehicle owner.

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Documents Required to Raise a Goods Carrying Vehicle Insurance Claim

To raise a claim under a goods carrying vehicle insurance policy, the following documents need to be submitted:

  • RC of the vehicle
  • Valid driving license
  • Copy of FIR
  • Pollution Under Control Certificate
  • Duly filled claim form
  • Aadhar Card copy
  • Insurance policy papers
  • Permit of route
  • Tax Paid receipt
  • Newspaper cutting, if printed on the newspaper as a proof

No Claim Bonus

No Claim Bonus (NCB) is a benefit provided by motor insurance companies to the policyholder for not raising a claim in the previous policy year. This benefit is granted in the form of a premium discount that can be utilized at the time of policy renewal. The insurance company provides an additional benefit or discount to the policyholder every consecutive year for not raising a claim. 

The Insurance Regulatory & Development Authority of India (IRDAI) has set a specific percentage of NCB per claim-free year that has to be followed by all motor insurance companies. Take a look at the following table to know the NCB percentage as specified by the IRDAI:

Policy Duration Without Raising a Claim Percentage of No Claim Bonus
No claim for 1 year 20%
No claim for 2 consecutive years 25%
No claim for 3 consecutive years 35%
No claim for 4 consecutive years 45%
No claim for 5 consecutive years 50%

However, there are two conditions under which the No Claim Bonus is not provided to the policyholder. They are:

  • If the policyholder raises the claim
  • If the policyholder does not renew the policy within 90 days of expiration


Written By: PolicyBazaar

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