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Basic Differences Between Private Car Insurance And Commercial Car Insurance

Wish

Written by Udit Varshney

Updated Oct 15, 2023

Motor vehicles can be broadly categorised into private vehicles and commercial vehicles. Let’s read the difference between commercial car insurance and private car insurance in detail in this article.

Motor vehicles can be broadly categorised into private vehicles and commercial vehicles. Since the usage of these two car types is different, their insurance requirement and coverage are also different. Thus, insurance providers offer insurance plans which are specially designed for private cars and for commercial cars. Let’s read the difference between commercial car insurance and private car insurance in detail in this article.

Basic Differences Between Private Car Insurance And Commercial Car Insurance

Differences Between Private Car Insurance And Commercial Car Insurance

We've covered the essential features and distinctions between private and commercial auto insurance, and the various requirements for each.

Private Car Insurance 

Any transport car whose unladen weight does not exceed 7,500 kg and is used solely for social, domestic, and pleasure purposes, and the insured's own company, is classified as a Private Car. The policy excludes use for hire or reward, organised racing, speed measuring, and carriage of products (other than samples) in connection with any trade, or use for any reason in connection with the motor trade. Personal Injury coverage can be added to the policy for an additional premium.

  • Offers monetary coverage against damages or losses because of an accident.
  • Financial cowl against felony, natural calamities, hearth and riots.
  • Personal Accidents protect the driver.
  • Third-party liabilities.
  • Excludes business/commercial use of the vehicle.
  • Excludes traveller cowl. However, you'll prefer the add-on to shield passengers in addition.
  • Excludes personal drivers if you've got not opted for extra coverage.

Commercial Car Insurance

A commercial vehicle insurance policy is a customised car insurance policy that protects a commercial vehicle and its owner-driver from damages and losses. This may include deaths and damages caused by injuries, crashes, natural disasters, and fires. Commercial vehicle insurance is required for all businesses' vehicles, including auto-rickshaws, cabs, school buses, tractors, commercial vans, and trucks, among others.

  • Offers monetary security to the policyholder’s business financially thanks to losses or damages to the business car just in case of an accident.
  • Coverage against total loss thanks to felony, hearth and natural disaster.
  • Offers personal accident cowl of the motive force.
  • Passenger cowl choice.
  • Includes Third-party Liabilities.
  • Excludes use of the car for private use.
  • Regular wear and tear.
  • Electrical/mechanical breakdown.
  • Loss or damages thanks to radiation/nuclear attack/war.
  • Damages thanks to use of the car on the far side have its limitations.
  • Damages caused by somebody driving the insured car aside from the motive force mentioned within the policy.

Conclusion

Decide what the standards are for a company vs. personal auto insurance. Are you attempting to use the car for commercial purposes, such as a taxi, or are you attempting to use it for personal purposes, such as visiting friends or relatives? It depends on the situation.

It's also illegal to use a personal vehicle for commercial purposes or for business functions. It will cause the transportation authority to enforce fines. As a result, they must purchase commercial car insurance.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Wish

Written by Udit Varshney

Udit has built B2C segments across various industries and has had significant contributions to the insurance sector. Read More

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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