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Difference Between Private and Commercial Car Insurance

Car insurance is a financial tool that provides you financial stability against any expenses raised due to the damage to your car. A car is an important mode of transportation for many people. Whether it is a private car or a commercial car, to ensure the protection of your car, you need to buy car insurance. You can​ buy​ car insurance online, from the comfort of your home. ​

A commercial car runs more than a private car. And that's why it is more prone to damage as compared to private cars. There are two types of car insurance based on the type of car, let us find out: 

1. Private Car Insurance

Private car insurance is a type of motor insurance policy that covers your personal car. This insurance policy will cover you financially against the losses that arise due to an accident, natural calamity, theft, or fire. It not only provides reimbursement for third-party losses but also provides compensation in case of a personal accident to the owner.

You should also that a private car is not legally eligible to use for any business activity that involves the transportation of goods or commodities. 

2. Commercial car insurance

Commercial car insurance is a type of motor insurance policy that protects taxi or cab which is used for the transportation of passengers. Buying commercial car insurance for your business is essential as it protects your car financially against any damage. 

You can either go for third-party liability insurance, which is mandatory under the Motor Vehicles Act, 2019, or you can opt for the comprehensive car insurance policy. 

Now let's find out what is the difference between Private Car and Commercial car insurance: ​​

RISK INVOLVEDThere is a high risk with commercial cars as the number of miles it runs is more, hence the risk exposure is higher. This, in turn, affects the insurance premiums and deductibles. Whereas, the risk is comparatively lesser with a private car. The usage of the car may not be rough. And this keeps the insurance premium and deductible low.
POLICY COVERA commercial car insurance policy protects the policyholder's business financially against any damage caused due to a serious accident. This insurance provides coverage against fire, theft, natural disaster, accident, and personal accident of the driver & Third-party liability.Private Car Insurance provides financial coverage against fire, theft, natural calamities, accident, riots, and personal accident & Third-party liability.
PREMIUM RATES The premium rate of commercial car insurance depends on the risk involved, the age of the vehicle, and the cubic capacity. The premium rate for private car insurance depends on the cubic capacity, but it is independent of the vehicle age. Also, the premium rate is comparatively less than commercial car insurance.
DOCUMENTS REQUIRED DURING CLAIM In order to claim your coverage for a commercial car, you need to deposit, Fitness Certificate, Registration Certificate, Load Challan, Driving License, Taxation Book, Permit, Copy of FIR, Trip Sheet. In order to claim your coverage for a private car, you need to deposit, Registration Certificate, Driving License, and Taxation Book.