What is the Difference Between Private and Commercial Car Insurance?

It takes years of savings for people to buy a car and a well-planned budget to further maintain it. As expensive as cars are, their repairs are just as expensive. Therefore, it is necessary to have car insurance. Based on this purpose there is private and commercial car insurance available in India.

Now, let us discuss commercial car insurance vs private insurance to understand their differences more clearly and to know more about their benefits.

Private car insurance is a motor insurance policy that provides insurance against cars used for private purposes.

A private car insurance policy insures the owner of any damage caused to the car due to:

• In cases of natural calamities
• Accidents
• Theft and fire
• Against third-party liabilities that are against damages caused to another car during an accident
• Personal accident cover for the owner-driver of the car in case of accidents

However, this insurance does not include cars involved in any kind of business or in commercial services like transporting goods or people.

Commercial car insurance provides insurance against damages to cars that are used for commercial purposes. Cars that are used for cab services where they transport people from one place to another are applicable for a commercial car insurance policy. It provides financial protection to the cars where the damage can directly affect the business of the car owner.

This policy insures the owner against any damage caused to the car due to:

• Accidents
• Natural calamities
• Theft or fire
• Third-party liabilities in case of accidents that cause damage to another car
• Accident cover for the owner-driver of the car in cases of fatal injury or death
• Financial aid in case of accidents to any employee or paid driver apart from the owner

A private car insurance policy cannot be converted into a commercial car insurance policy. To use a private car for commercial purposes car owners must buy a new commercial car insurance policy. However, a few necessities must be taken care of before buying commercial car insurance. The requirements for changing a private car into a commercial car are as follows:

• Change the vehicle registration from private to commercial. This can be done online or by visiting the Regional Transport Office.
• After the registration process is complete, the owners can buy commercial car insurance.

Therefore, owners must choose the right motor insurance for their vehicles based on its purpose. This article will guide you to get a clear idea of a few things about commercial car insurance vs private insurance.