According to a World Bank report, India owns 1% of the vehicles worldwide, but 11% of total road accidents occur here. Using vehicles involves numerous risks, such as road accidents, theft, and other crimes.
Commercial vehicle insurance is important if you use your vehicles for business purposes. It protects your vehicle from various losses, like damage and third-party liabilities, in case of any unforeseen event.
You must have adequate knowledge to find appropriate motor vehicle insurance for your business. In this article, you will learn the importance of vehicle insurance.
What is commercial vehicle insurance?
According to the Motor Vehicle Act of 1988, it is mandatory to have vehicle insurance. Motor vehicle insurance protects commercial vehicles and any personal vehicle used for commercial purposes.
The insurance protects the vehicle from third-party liabilities (by paying for any medical costs or property damages owed to third parties). It also protects you from any damage that might happen in an accident by paying for your or the car’s medical bills and repair costs.
When your business depends upon vehicles, it becomes even more important to have commercial vehicle insurance as the unpredictability rises.
Vehicle insurance covers several vehicles, including trucks, auto-rickshaws, pickup vans, tractors, trucks, company cars, cabs, and others.
Why is it important to have vehicle insurance?
Insurance has always protected us from the unpredictability of life. Getting your commercial vehicles insured is beneficial for a multitude of reasons. Some of the reasons why having vehicle insurance are considered essential are:
1. Protects you from any financial stress
Commercial vehicle insurance protects your vehicle from financial loss due to unprecedented circumstances. It covers the loss or damage that might happen to the vehicle in case of any natural calamity like an earthquake, tsunami, flood, etc.
Also, if the car gets into an accident, it covers third-party liability, which includes damages, medical care, funeral costs, etc., for the other person.
Furthermore, when your vehicle is on the road earning you money, it is crucial to protect it. You can never be sure about what might happen in the next minute. Thefts, fires, or terrorist acts are always unforeseen. Insurance will also protect you from man-made calamities.
2. Amount reimbursement
There is no time to fret about finances when an unfortunate event occurs. You need the money urgently, without any hassle. Motor vehicle insurance helps meet urgent monetary requirements by reimbursing the insurance money.
If the driver or vehicle owner meets with a fatal event that leads to their sudden demise or permanent disability, then the amount is reimbursed. It can help people pay for expenses during unfortunate times.
3. Third-party liability coverage
In the case of collisions, the damage does not only happen to the vehicle. Property loss, life loss, and vehicle damage are also risks.
These losses and damages require a hefty amount to be covered. If your vehicle is not insured, you will have to pay for these expenses out of your own pocket, which can disrupt your business operations.
Vehicle insurance covers the finances of all these third-party losses that might take place during an unforeseen accident. It helps cover expensive medical costs, property damage repairs, and even death costs.
4. Benefits that are better than personal auto policies
If you use a personal vehicle for business purposes and only have personal auto insurance, you won’t get coverage against the damages that occur during business activities.
For example, X uses their personal car to deliver the products to their customers. They only have personal auto insurance because it’s their personal vehicle. However, one day, while delivering the products, they meet with an accident, and there is a huge property loss because of the accident. In such a circumstance, X will have to pay for the damages that occurred due to the accident from their personal finances because they were using the vehicle for business purposes and not their personal use. Also, they don’t have commercial vehicle insurance to cover the damages.
5. Quick monetary help
When mishaps happen on the road, you require quick monetary help. With vehicle insurance, this is simple. All you need to do is finish the required formalities, and you can get quick financial aid from the insurance company.
During an accident, when the vehicle gets damaged, it is a possible loss to your business. However, you can get quick repairs when you have a vehicle policy.
6. Mandatory as per the law
Having commercial vehicle insurance is mandatory in India as per the law. Not having insurance can be risky for you, as your vehicle might also get seized. With commercial vehicle insurance, you do not have to fret about any such threats.
7. Towing damages are covered
Many times, the mechanical towing away of the vehicles leads to damages, which can cause problems during business activities. With vehicle insurance, such damages are covered, and you can get monetary help for the same with ease.
Commercial vehicle insurance is mandatory for all vehicles, despite their size, as per the Motor Vehicle Act of 1988. Using a vehicle for organizational requirements comes with several risks, which may lead to vehicle damage, property loss, or even demise. You should get motor vehicle insurance to protect the vehicle and the people against these damages. Having adequate insurance can help you with the monetary requirements during unfortunate events on the road. With insurance, you do not have to fret about the losses and damages that might hinder your business.
You can get more information regarding commercial vehicle insurance by visiting the Piramal Finance website. Check out their blogs for more information on financial matters, such as personal loans, credit cards, and financial management.