The number of vehicles on Indian roads has increased drastically over recent years. Be it for private usage or commercial purposes. People have started purchasing and using their vehicles for various reasons. However, it is important to know that under Indian Motor Vehicles Act (MV Act), every vehicle needs to be insured before being driven on an Indian road. Vehicle insurance companies in India offer multiple motor and fleet insurance plans. It caters to different types of vehicles that the policyholder has.
In this context, the policyholder needs to know the basics which are the type of motor insurance plans and their differences. Like most customers, are you also confused between commercial motor and fleet insurance? This article will cover a deep dive into the insurance types and offer insight into which one you should purchase.
Difference between Commercial vs Private Vehicle:
When trying to understand the difference between commercial motor insurance and a fleet insurance plan, it is essential to first understand what exactly differs between a commercial vehicle and a private one.
Commercial Vehicle
Any motor vehicle that is actively employed for business reasons is considered a commercial vehicle. It can be used to transport goods or people for personal or commercial gain. Pickup vans, semi trucks, box trucks, buses, coaches, vans, taxicabs, jeeps, trailers, as well as travel trailers are examples of CMVs.
Private Vehicle
Private automobiles are any motor vehicles that are actively employed for personal reasons. It can be used for private or individual transportation that is not available to the general public. The other advantage is that the user has total control over the schedule and route of travel.
Difference between Motor and Fleet v/s Non-Fleet Commercial Vehicles:
Now that we have established the differences between commercial vehicles and private vehicles, we have to set boundaries between fleet and non-fleet vehicles. However, it is important to know that both these categories of vehicles belong to the commercial class. So, if you have a brand-new SUV that you use to commute to work, you cannot consider it a fleet vehicle.
Fleet Vehicle
Usually, some organization, private or government, or any other entity rather than a person or family owns fleet vehicles. Vehicles run by automobile rental firms, taxicab businesses, utility services, public transport companies, as well as police forces are typical examples.
Non-Fleet Vehicle
When a specific organization or government authority, or any other company owns commercial vehicles that are not a part of any fleet, then you can call them non-fleet vehicles. You may use the car either independently or for uncommon emergency services.
Motor and Fleet Insurance Plans:
Fleet insurance is a legal contract between two parties. The parties are the insurance provider and the policyholder. Under this, the former insured a set of commercial vehicles owned by a particular organization. However, the latter promises to pay a pre-set amount of premium in exchange for the coverage received. Covering each and every vehicle independently is an expensive affair, and hence motor fleet insurance comes in handy.
The fleet insurance plans offer the following benefits:
Easy Claim Management in Motor and Fleet Insurance
Fleet insurance coverage covers all of your commercial vehicles under one policy. This simplifies the claims procedure and makes it considerably more manageable. Consider owning five to ten automobiles, each with its insurance policy. The policyholder must call two insurance companies and file separate claims if two vehicles are damaged. But you would only need to contact one insurance provider even if all of your commercial cars meet with an accident or are destroyed under fleet insurance.
Vehicle Damage Cover in Motor and Fleet Insurance
Fleet insurance protects cars against damage or loss caused by fire, collisions, theft, natural disasters, and other unforeseeable events. Let’s suppose one of your employees is driving one of the insured vehicles and gets into a collision. The accident scratched almost half of your new commercial vehicle, and the garage estimated the repair to be very costly. So, in this case, you can always fall back on your motor fleet insurance plan for coverage against the damage sustained by the insured vehicle.
Employee Cover
Several comprehensive fleet insurance packages also cover accidental injuries to the insured commercial vehicle’s driver. This is extremely beneficial if your car meets with a collision. Any accidental injuries or emergency medical care for the driver will be under the coverage of the fleet insurance. This is irrespective of the fact whether it is you or any of your employees.
Low Premiums in Motor and Fleet Insurance
One of the main reasons for having fleet insurance in place is that it significantly reduces the insurance costs of multiple vehicles. Whenever a business has five-ten or even more vehicles set for business operations, it can save them a good amount of money if they decide to get single fleet insurance over different commercial auto insurance plans for different vehicles.
Legal Obligations
As per the Indian Motor Vehicles Act, you need to have a valid third-party-only insurance plan. You need this to ply your commercial vehicle on Indian roads. However, it is always advisable to opt for a comprehensive plan in order to cover your own damages to your vehicles as well. Fleet insurance covers that legal obligation in a single policy for all vehicles.
Commercial Auto Insurance Plans:
Commercial auto insurance offers coverage against legal third-party claims and damage sustained by the vehicle due to accidents. These accidents would be due to natural disasters and man-made calamities. It is issued for one commercial vehicle only instead of covering a group of vehicles like fleet insurance.
They offer the following benefits:
Affordable in Certain Scenarios
One of the primary reasons individuals choose fleet insurance is because it provides coverage for several vehicles under a single policy. However, if you have a new business, getting a commercial auto third-party insurance plan for your two-three cars makes sense, and then upgrading to more comprehensive fleet insurance when you have more vehicles. This is how commercial auto insurance can prove to be more affordable in certain scenarios.
Third-Party Coverage
The insurance will provide coverage for all legal liabilities of the vehicle if it meets with an accident. If a third party claims legal responsibility to settle the damage that your vehicle causes, it comes under the purview of a third-party insurance plan. The government of India mandates every vehicle owner to have a valid third-party insurance plan to ply their vehicles on Indian roads.
Own-Damage Coverage
If your vehicle gets into an accident and needs repairs, the insurance will take care of all the damages to your vehicle.
Legal Obligations
Before driving on an Indian road, every vehicle must have a proper insurance plan in place, according to the Motor Vehicles Act of India. Commercial auto insurance covers that legal responsibility.
Difference Between a Motor and Fleet and a Non-Fleet Commercial Auto Insurance
Your insurance providers will evaluate a number of variables while getting fleet auto insurance. One advantage is that all of your commercial cars are covered by a single insurance policy. This also suggests that you will just have one insurance renewal due rather than having to keep track of each automobile you own.
You need to tailor the specific needs of your company under fleet insurance plans. This implies that you may have protection for a set of cabs, a fleet of vans, or a mix of different cars. Fleet auto insurance may typically make assigning drivers to your cars simpler. You will frequently need to call your insurance company to enroll a driver for each vehicle if all of your cars are covered separately,
Obtaining the proper fleet insurance coverage for larger businesses ensures that vehicles are covered while also usually reducing expenses. For smaller vehicle owners, starting with a non-fleet or commercial auto insurance coverage may be preferable. This process frequently entails assessing each vehicle separately.
This means that you must carefully consider the option in light of the vehicles that the firm owns. Vehicle law expenses vary from one state to another. Vehicle age, vehicle type, and usage frequency must all be considered as a result.
You need to frequently assign a particular driver to it to drive lawfully when the automobile is under commercial coverage. This may function for a taxi firm when each operator has their own vehicle. This would be less efficient for a package delivery firm with a fleet of vehicles that might be handled by numerous drivers at any given time.
The Bottom Line
It is common for business owners to become perplexed by the nuances of the numerous forms of commercial insurance. That’s why it’s so important to understand your policy and know what you have included in the plan. Choosing the right insurance policy requires patience. But you can rest assured that you will get the best deal on offers that are suited for your business if you decide to take professional assistance.
About The Author
Bhavani
MBA Finance
With six years of experience in the insurance industry, Bhavani is a recognized expert in motor fleet insurance. As a dedicated writer for SecureNow, she crafts insightful blogs and articles that simplify the complexities of motor fleet insurance policies. She is passionate about educating businesses on the benefits and management of fleet coverage, making technical details accessible and practical. Their deep understanding of motor fleet insurance regulations and best practices ensures that readers receive up-to-date and valuable information, establishing Bhavani as a trusted voice in the insurance community.
