Businesses, whether small or large, that use vehicles for their operations must ensure that their automobiles are protected under a commercial vehicle insurance policy. This policy works as a guardian angel to safeguard vehicles used for business travel.

The main goal behind purchasing this type of insurance cover is to shield your automobile from financial damages due to theft, accidents, and other risks.

Keep on reading to understand why commercial vehicle insurance is important. This comprehensive guide will also cover the importance of e-rickshaw insurance, its types, add-ons, exclusions, inclusions, and other important details.

What is E-Rickshaw Insurance?

In India's crowded streets, e-rickshaws are a convenient and affordable option for short-distance transportation. However, to drive your e-rickshaw safely on Indian roads, purchasing an e-rickshaw insurance is a smart decision.

An e-rickshaw insurance is a type of commercial vehicle insurance plan, which works as a legal agreement between the insurer and the insured. Under this policy, the insurer is liable to provide financial coverage for any unforeseen damage or loss caused by the electric three-wheeler that can occur from an accident, theft, or natural disaster.

Importance of Commercial Vehicle Insurance and Which Vehicles Are Covered?

Commercial vehicle insurance is a tailored insurance policy that covers damages and losses caused to or by a commercial vehicle in case of accidents, theft, etc. This type of insurance plan also covers liability claims of the business vehicle.

If you own a commercial vehicle, having this insurance cover is important because:

1. It is Mandatory by Law: As a mandate by law, it is necessary to have a liability policy to protect third parties against losses and damages that are caused by the covered commercial vehicle.
2. It Protects Your Vehicle: Provides coverage for damages caused by accidents, natural disasters, theft, and more.
3. It Safeguards Your Business: The policy helps cover legal costs as well as damages that are caused due to bodily injuries. The insurance also provides financial cover in case of property damage that is prompted by your business operations.
4. It Provides You Financial Security: When you find yourself in a business crisis that is caused by your covered vehicle, a commercial vehicle insurance policy can act as your financial cushion.
5. It Protects Third Parties: The policy helps you cover damages, medical care, and even funeral costs for third parties if your vehicle is involved in an accident.

A comprehensive commercial vehicle insurance policy provides coverage for different types of business automobiles. These include:

1. Passenger-carrying Vehicles: These include vehicles that are used specifically to carry one or more passengers such as taxis, cabs, e-rickshaws, auto rickshaws, school or private buses, passenger-carrying vans, etc.
2. Light Commercial Vehicles: These include light vehicles typically used for transporting goods or making deliveries for business purposes, such as minivans, mini trucks, pickups, etc.
3. Goods Carrying Heavy Vehicles: These include vehicles used to carry goods that need to be transported from one place to another like trucks, tempos, trailers, etc.

Why Do You Need to Purchase E-Rickshaw Insurance?

Purchasing an e-rickshaw insurance plan can be a smart decision. The reasons why getting this coverage is important are listed below:

1. Mandatory By Law: As per the Motor Vehicle Act of 1988, it is mandatory for all e-rickshaw owners as well as businesses that own e-rickshaws to buy a Third-party liability-only policy. This insurance plan protects you financially if the vehicle suffers or causes damages to a third-party vehicle, person, or property.
2. Protects Vehicle Owner From Losses: A comprehensive e-rickshaw insurance plan protects the owner of the covered vehicle from financial losses that occur due to factors like thefts, accidents, fires, natural disasters, acts of terror, or other unforeseen circumstances.
3. Covers Unanticipated Losses: If you run a business that uses e-rickshaws, then this insurance policy ensures that you are covered for any unforeseen loss or damages.
4. Displays Goodwill: Purchasing an e-rickshaw insurance plan displays that you are a responsible business owner who is concerned and thinks about the safety of passengers, which shows goodwill.

Types of E-Rickshaw Insurance in India

Most insurance companies in India, provide two major types of e-rickshaw insurance policies. These are:

1. Third-Party Insurance Plan: Mandatory by law, this third-party liability insurance policy provides coverage against any third-party liability caused by an accident. This kind of coverage guarantees that you won't be held responsible for any damage your e-rickshaw may cause.

The insurer compensates for the losses by making a payment on your behalf.

2. Comprehensive Insurance Plan: As the name suggests, the policy offers comprehensive coverage, where you as insured get coverage for both your damages and damages caused by theft, fire, natural disasters, terrorism, etc. This is not a mandatory cover and you can buy this plan as per your requirements.

Factors to Consider Before Purchasing E-Rickshaw Insurance

To ensure that you purchase the right e-rickshaw insurance policy, you must take into account several important factors. These include:

1. Offered Services:  Look for a policy that offers premium service standards like 24x7 customer support or the way they treat customers when filing a claim. They should also offer a wide network of cashless garages, among other services.
2. Right Insured Declared Value (IDV): While purchasing an e-rickshaw insurance policy, check the insured declared value that the insurer is providing. It is the maximum amount that you get as coverage when filing a claim. Choosing a higher IDV is advised if you can afford it.
3. Claim Settlement Ratio: Check the claim settlement ratio before buying e-rickshaw insurance. This ratio will provide you with a clear picture of the percentage of claims that the insurer successfully settled in the previous years.
4. Available Add-Ons: Search and review the add-ons available and choose the ones you require. This will enhance your coverage while also ensuring that you purchase your plan at the best price.
5. No Claim Bonus: This is like a reward that insurance companies provide for not raising a claim in a year. Usually, this is provided as a reduction in a premium amount in the subsequent year’s plan. Check if the company considers NCB in their insurance policy.

Add-ons, Inclusions, and Exclusions Under E-rickshaw Insurance

E-Rickshaw Insurance- Add-ons

Apart from the coverage provided under a comprehensive e-rickshaw insurance policy, you can also enhance your coverage with add-ons provided by insurance companies. Here are the add-ons provided under e-rickshaw insurance:

1. Zero Depreciation Cover: This add-on ensures that the depreciation of the vehicle as well as its parts that occur over time, is not taken into account when filing for a claim. This increases the amount of compensation you get when you file a claim.
2. Consumable Cover: Covers the cost of your e-rickshaw’s bits and pieces. For example, screws, nuts and bolts, engine oil, and grease in case of an accident.
3. 24X7 Roadside Assistance: Provide roadside assistance 24x7 in case your e-rickshaw faces a breakdown on the road, due to a flat tire, accident, malfunctioning battery, or more.
4. EMI Protection Cover: If you have purchased your e-rickshaw on loan and your vehicle is damaged by an accident and is sitting in a garage for repair, this add-on will help you pay the EMIs to the financier of the vehicle.
5. Return to Invoice: If your e-rickshaw suffers total loss or is stolen, this add-on provides compensation. The compensation can be in the form of payment for a new vehicle at the prevailing ex-showroom price.

E-Rickshaw Insurance - Inclusions

A comprehensive e-rickshaw insurance policy includes cover for the following:

1. Accidental Damage: Covers any damage caused to the e-rickshaw in case of an accident.
2. Fire and Natural Calamities Damage:  Covers damage caused by fire or natural calamities like floods, earthquakes, etc.
3. Personal Accident: In case of an accident of the e-rickshaw that leads to the death or injury of a passenger, driver, or owner of the vehicle, the policy will provide financial coverage.
4. Third-Party Liability: If any damage is caused to a third party directly by the e-rickshaw, the policy covers the damages.
5. Theft: In case of the theft of the e-rickshaw, the insurance provides coverage. The plan also covers damages caused to the vehicle due to theft.

E-Rickshaw Insurance-  Exclusions

As much as it is important to know the inclusions of the e-rickshaw insurance policy, you must also understand the exclusions. Take a look at what is not covered or excluded from this policy.

1. Drunk Driving: If the insured is found driving the e-rickshaw under the influence of alcohol or drugs at the time of the accident, the damage caused will not be covered.
2. Consequential Damage: If the damage caused to the e-rickshaw is not a direct result of an accident or natural disaster, it will not be covered.
3. Driving Without License: In case of an accident, if the insured is found driving the e-rickshaw without a valid driving license, no coverage will be provided
4. Electrical or Mechanical Failure: If the e-rickshaw suffers from a mechanical or electrical failure, the insurer will not pay for the repair or replacement of damaged parts.
5. Contractual Liability: Any claim that arises out of any contractual liability is not covered.

Choosing the best commercial vehicle insurance policy for your e-rickshaw will help keep you as well as your vehicle safe in case of any damage. With the right insurance coverage under your belt, you can focus on growing your business with confidence, knowing that you are protected every mile of the way.