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You might have invested in vehicles be it a cab, a mini-truck, or a school bus to generate income for yourself. These vehicles become important revenue-generating assets for you.
Like any other revenue-generating asset, you need to financially protect these vehicles to avoid business disruption due to any kind of accidental damage or liability due to damage of any third party person or property on the road.
What’s more, you are legally required to buy an insurance cover for your vehicle. If you don’t own one, you can face legal repercussions like fines, etc.
In this article, we’ll discuss what insurance for commercial vehicles is and how it works.
A vehicle that is used for commercial purposes to transport either goods or passengers is called a commercial vehicle. It is a vehicle meant for business purposes and weighs 3.5 tonnes or more.
Examples: Cabs, taxis, trucks, lorries, auto-rickshaws, school buses, cranes, etc.
Insurance for commercial vehicles is similar to any standard vehicle insurance policy. The insurance policy promises financial coverage for any losses or damages caused to the vehicle due to accidents, fires, calamities, etc. Buying insurance for a commercial vehicle can help you manage any financial losses arising due to such incidents.
Here are 3 important reasons behind buying insurance for commercial vehicles -
A commercial vehicle is part of your business family. It is always on the road, sometimes even for 24 hours. Its frequency of travel is higher than private vehicles, which in turn, exposes it to a greater risk of damage. Any damage to a commercial vehicle puts the vehicle off-road, thus having an impact also on the business and its revenues. It is hence important to cover commercial vehicles with insurance, It financially covers your business against any losses due to major damage to your vehicle.
Commercial vehicles run for long hours and across different kinds of routes, areas, and cities. These vehicles are often driven by paid drivers who may cause injury to someone on the road, or ram the vehicle to an expensive property/asset. As per law, your business will be liable to pay damages for injury or damage based on liability awarded by the court of law. Such losses may severely affect your business and its profitability. Through third-party insurance, you are covered for unlimited liability on death/injuries and liability up to Rs. 7.5 lakhs in case of damage to property.
Besides the liability explained above, It is also compulsory under the law that every vehicle (be it commercial or private) on the road must have at least third-party insurance. If you don’t comply with these rules, you can face legal repercussions like fines, etc. that again be an unnecessary loss for your business.
Commercial vehicles and the policies available can be of various types. Let’s see.
Passenger carrying vehicles are intended to carry one or more passengers and include cabs, taxis, private buses, school buses, auto-rickshaws, etc. It is important to get such vehicles insured because they have a huge responsibility towards the passengers and the coverage will safeguard them against any unfortunate circumstances.
Goods carrying vehicles, as the name suggests, are used for the purpose of transporting various goods from one place to another. They include lorries, trucks, tempos, etc.
Given their large size, they are prone to higher risks. Buying insurance for a goods carrying vehicle not only safeguards the third party from loss or damage but also protects the owner-driver and the vehicle from natural calamities and ill-fated situations.
This insurance is a must-have for businesses that regularly use such vehicles to transport goods.
All vehicles that are used for commercial purposes, other than the ones listed above, are classified under miscellaneous and special vehicles. They include vehicles used for farming, construction, mining, etc.
An insurance policy for such vehicles will -
Here is why owning insurance for commercial vehicles is beneficial -
Yes! You can purchase insurance for commercial vehicles online by following these simple steps -
Note: The application process online may vary from insurer to insurer.
Here’s a table that demonstrates how insurance premiums vary across different commercial vehicle types -
Vehicle type | The capacity of the vehicle | TP premium rates |
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Passenger Carrying Four Wheelers (Up to 6 passengers) |
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Passengers carrying motorized two-wheelers |
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Goods carrying commercial vehicles (Except three-wheelers) |
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For your money-earning wheels, commercial car insurance is more than simply another coverage; it's a shield full of vital protection:
A well-thought-out safety net for commercial vehicles is more important than simply checking off regulatory requirements.
Let's face it, your car is an income generator. Here's why you shouldn't leave it uninsured.
According to evaluations, insurer infrastructure, claims procedures, and expert ratings, these are India's best commercial vehicle insurance for 2025:
Provider & Plan | Highlights | Why is it Good? |
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Digit Commercial Vehicle Insurance |
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Bajaj Allianz Comprehensive CV Policy |
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Reliance General CV Insurance |
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ICICI Lombard CV Insurance |
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Note: Our top plan selections are based on: Industry recognition, customer experience metrics, insurer comparisons, features, and ratings.
It's not hard to figure out how much your commercial car insurance will cost; there is a method to it.
Car Insurance Premium = Own Damage Premium – (No claim bonus + discounts) + Third Party Liability
Insurance companies provide a convenient premium calculator: simply enter the vehicle's make, model, registration state, manufacture year, and your personal details. When you click "calculate," you'll get an estimated premium for both new and used vehicles, be it comprehensive or third-party.
Here's a brief look at third-party premiums (exclusive of GST; comprehensive additions cost more):
Vehicle Category | Third Party Premium |
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Goods carriers (≤7,500 kg GVW) |
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Goods carriers (7,501–12,000 kg) |
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Goods carriers (12,001–20,000 kg) |
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Goods carriers (20,001–40,000 kg) |
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Goods carriers (Above 40,000 kg) |
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3 wheelers (public) |
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3 wheelers (private) |
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Trailers - Mini |
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Trailers - Other types |
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You can expect to pay an extra few thousand rupees to over Rs. 50,000 a year for comprehensive cover for heavy-duty carriers and other vehicles.
A good tip? Online renewals, avoiding unnecessary add-ons, and choosing electronic payments can all significantly reduce the price you pay.
The insurance premium for your commercial vehicle is determined by a variety of factors. Here are the details:
This is basically the current market worth of your car. A higher IDV provides more coverage, but at a higher cost.
Larger engines mean more danger, which means higher insurance rates. That's just basic maths.
The cost of third-party insurance is lower. However, adding options like zero-depreciation, roadside assistance, or return-to-invoice to a comprehensive plan makes you sleep better, but it comes with a cost.
Your premium will go down if you choose a higher deductible, but keep in mind that you will have to pay more out of pocket in the event of a claim.
Over a five-year period, you can receive a savings of up to 50% if you remain claim-free. However, one claim may offset that benefit.
High-risk areas or crowded city streets? You can expect premiums to reflect this. Also, public carriers are subject to higher charges than private ones.
It may surprise you to learn that your driving record and licence history also matter. Lower risk equals lower rates.
Although they might not be eligible for as many add-ons, older cars have lower insurance costs.
Prior to clicking "buy," pause and consider this:
You can really improve your basic insurance with these extra covers:
Compared to other options, SMC Insurance is far better and offers many significant benefits:
SMC's online method is as simple as ordering a chai:
Click on "Commercial Vehicle Insurance" on the SMC website.
Enter the car type, make and model, RTO region, and duration of the insurance policy.
Browse and compare prices from partner insurers.
Select your add-ons (such as roadside assistance or engine protection) and coverage.
Pay online, and insurance documents are delivered to your inbox promptly.
Download the policy through the SMC app or email, make sure everything is correct, and you're ready to go.
With SMC, submitting a claim is easy:
When things go wrong on the road, commercial vehicle insurance is your safety net. The correct coverage keeps your wheels (and revenue) veering, whether it's a minor collision or a serious accident. Consider it an investment in mental well-being rather than merely security. With support like SMC Insurance, you can future-proof your business in addition to insuring your car with features like customised add-ons, round-the-clock assistance, and easy digital procedures. Thus, don't wait for problems to arise. With the right policies in place, you can grow your business with assurance, security, and complete authority.
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Simple Process
We want to say thanks to SMC team, appreciate the entire team for the support and response to our questions. Our team is feeling confident because of SMC's support system.
Easy Renewal process
The process to renew my 2-wheeler policy is indeed very quick and easy. Got it done in just 10 minutes. Thanks.
Quick Response
I thought let me renew my two wheeler policy with SMC and see the experience. The experience was good and simple, the only gap which I felt was that the details of the vehicle did not come up after mentioning the vehicle number.
Yes, you can easily purchase it online through platforms like SMC Insurance. Just enter your vehicle details, compare quotes, pick the plan, pay, and receive your policy instantly.
Yes, at least third-party insurance is legally required for all commercial vehicles on Indian roads.
No, you’ll need to purchase a separate commercial policy. Private insurance doesn't cover business use.
Yes, passenger and goods vehicles have different premium rates, coverage types, and regulatory norms due to their unique risk profiles.
You could face fines up to Rs. 2,000 and/or imprisonment. Plus, any accident-related liability could fall entirely on you.
Premiums vary based on vehicle type, engine capacity, usage, and location. For example, TP premium for a 7,500 kg goods vehicle is around Rs. 16,049/year.
You’re liable for all damages (your own and third-party); plus, you risk fines, legal issues, and business disruption.
It’s based on factors like vehicle type, engine capacity, IDV, location, usage, driver history, and selected add-ons.
Legally, yes. But if you want protection for your own vehicle too, opt for a comprehensive policy as it is smarter in the long run.
Yes, you can transfer the policy to the new owner with the insurer’s approval. Make sure to update ownership details.
It’s a reward for not making any claims in a policy year. You get a discount on your renewal premium, up to 50% over time.
Yes, if you’ve included personal accident cover or opted for specific employee protection add-ons.
Yes, passenger-carrying vehicles like cabs, taxis, and auto-rickshaws have tailored insurance plans to cover passenger-related risks.
Visit your insurer’s website or app (like SMC Insurance), enter your policy details, pay online, and you’ll receive a renewed policy instantly.
Only if you’ve opted for the engine protector add-on. Basic plans usually don’t cover engine or gearbox damage caused by waterlogging or oil leaks.