Commercial vehicle insurance is essential for any business that relies on transport. It protects your vehicle from risks faced during daily operations like deliveries or goods movement. But many business owners make avoidable mistakes when selecting a policy.
In this blog, let’s get to know about the most common commercial vehicle insurance mistakes and how to avoid them to stay secure and stress-free.
Why Commercial Vehicle Insurance Matters?
Owning a commercial Vehicle comes with great responsibility, and this is why having the right insurance is crucial to protect your vehicle, your livelihood, and your peace of mind.
Legal Compliance
In India, every commercial vehicle must have a third-party insurance policy. This is required by law under the Motor Vehicles Act.
- It safeguards you from liability if your vehicle damages another person or their property.
- Without it, you may face legal penalties or even vehicle seizure during routine checks.
Protection from Unforeseen Damages
Accidents, floods, theft, or fire, anything can happen when your vehicle is on the road daily. A good commercial vehicle insurance policy ensures:
- Financial cover for repairs or replacement
- Peace of mind for owners and drivers
- Continuity in daily operations without stress
Safeguarding Cargo and Business Continuity
For many small business owners, a reliable commercial vehicle like the Tata ACE is the backbone of their operations.
- Comprehensive plans can help cover losses related to cargo or downtime
- Insurance supports fast recovery in case of vehicle issues
Common Pitfalls to Avoid When Insuring Your Commercial Vehicle
Many commercial vehicle owners make crucial mistakes when selecting insurance, which can leave them unprotected and facing unnecessary risks. Here are some:
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Opting Only for Third-party Insurance
Opting only for third-party insurance is an easy and cost-effective choice, but it could leave you vulnerable in the long run.
Misconception Around Affordability
Many vehicle owners go for third-party insurance because it has a lower premium. However:
- It only covers damage done to others
- Your vehicle repairs or losses are not included
Lack of Own-damage Protection
If your vehicle is damaged in an accident or due to natural disasters, a third-party policy does not help. That means you will need to bear all costs on your own.
How Comprehensive Plans Offer Wider Cover
A comprehensive commercial vehicle insurance plan includes:
- Third-party liability
- Own damage cover
- Optional add-ons
- Theft and natural calamity coverage
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Ignoring Add-on Covers
Overlooking add-on covers when purchasing insurance might seem like a way to save money, but it can leave you unprotected in situations where extra coverage is essential.
Popular Add-ons
These are highly useful with commercial vehicles like the Tata ACE:
- Zero Depreciation Cover
Full claim without depreciation deduction on parts
- Engine Protection
Helpful during monsoons or waterlogging
- Roadside Assistance
Immediate help if your vehicle breaks down mid-route
Cost vs Value of Add-ons
While add-ons slightly raise your premium, the price of commercial vehicle insurance still stays reasonable compared to the benefit you get in difficult situations.
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Delaying Policy Renewal
Delaying your policy renewal might seem like a harmless decision, but it can leave you exposed to financial risks and gaps in coverage.
Break-in Period Risks
If your policy expires, your vehicle is not covered during that break period. Any damage or theft that happens then will not be covered.
Financial and Legal Consequences of Lapse
- Penalties for driving uninsured
- Claim rejection for events that occurred during the break
- Inspection may be required for policy renewal, causing delays
How to Set Reminders
- Use apps or mobile wallets to get alerts
- Enable auto-renewals via your insurer’s website
- Mark your calendar a week before expiry
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Overlooking Insurer Reputation and Claim Process
Neglecting to consider your insurer’s reputation and the efficiency of their claim process can result in frustrating delays and complications when you need assistance the most.
Choosing the Cheapest Insurer Over a Reliable One
Low premiums might seem attractive at first, but can often lead to subpar service. For instance, rather than focusing only on the Tata Ace insurance price, consider these key factors as well:
- Reputation
- Claim process
- Customer service reviews
How to Check Claim Settlement Ratio
The claim settlement ratio shows how many claims an insurer has settled. Look for insurers with:
- Transparent documentation
- Fast turnaround times
- Minimal disputes
Customer Support and Garage Network Importance
- A 24/7 helpline makes a big difference in emergencies
- A wide garage network ensures your vehicle can be repaired quickly
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Not Reviewing Policy Terms Annually
Failing to review your policy terms annually can lead to outdated coverage, leaving you underinsured or unaware of important changes.
Your Usage Might Change Over Time
Your routes are longer now, or you have added more cargo trips. Your current policy may not be enough anymore.
Reviewing Premium, IDV, Add-ons
Check if:
- IDV still reflects your vehicle’s market value
- Add-ons are still relevant
- A better plan is now available at the same cost
Comparing Plans Every Renewal Cycle
Each year, compare a few insurers online before renewing. Many providers offer customised plans for light commercial vehicles like the Tata ACE.
Your commercial vehicle supports your business every day, so protecting it is important. A good insurance plan can save you from future stress and loss. Many people make small mistakes while buying or renewing. To avoid that, look for a plan that offers the right protection.
