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How Different are Private and Commercial Car Insurance?

Published On Mar 01, 2021 10:00 AM By InsuranceDekho

In the event of damage to your vehicle, insurance is an economical method to offset the financial costs. Car insurance is important when it comes to protecting your vehicle from potential failure or harm, whether it is a personal car or a commercial car. The risk factor must be the basis for insurance for your vehicle.

Car insurance provides financial security against damages to and by you car, depending upon the insurance type purchased. A commercial car covers more mileage than a private car and as such accidental losses/damages will need different coverage.

How Different are Private and Commercial Car Insurance?

Difference Between Private and Commercial Car Insurance

Although all forms of car insurance provide the driver with financial security, the scope varies as the risks are different. The following table gives an insight into the difference between insurance for commercial vehicles and insurance for personal vehicles:


Private Car Insurance

Commercial Car Insurance


Private car insurance is a type of insurance that covers personal cars. This insurance coverage would financially protect you from damages resulting as a result of an accident, natural catastrophe, robbery, or burning along with third party liabilities.

Commercial car insurance covers cabs/taxis and other vehicles used for transporting passengers. Buying commercial car insurance is important as it covers your car financially from any damage.

Risk Involved

Whereas, in a private vehicle, the risk is relatively lower. The use of a car is generally not very harsh or rough. And thus, the premium is relatively lower.

As the number of miles it runs is greater, there is a high risk for commercial vehicles, so the risk exposure is higher. Thus, it features a relatively higher premium.

Policy Cover

Private car insurance offers arson, robbery, natural disasters, injuries, protests, and third-party liabilities.

Commercial car insurance covers the business of the policyholder financially from any damage caused by a major accident. This insurance offers coverage to the driver and third-party liability against arson, robbery, natural catastrophe, collision, and personal injury.

Premium Rates

Private car insurance premium premiums depend on cubic capacity but are independent of the age of the vehicle. The premium cost is still considerably cheaper than that of commercial car insurance.

The commercial car insurance premium rate depends on the risk involved, the vehicle's age, and the capacity of the cubic car.

Documents required during claim

Driving License, RC, and Taxation Book

RC, Fitness Certificate, Driving License, Load Challan, Permit, Taxation Book, Trip Sheet, and Copy of FIR,

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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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