How To Change Private Car Insurance To Commercial Insurance?

If you want to use your existing private use car for commercial needs, you will need to register your private vehicle as a commercial one. It is not advisable to use a private car for non-private or commercial use if the RTO does not know that you are choosing to do so and has not authorised it. One aspect to consider while making this switch, is the transfer of your car insurance. Irrespective of why you have purchased a car in India, you must also purchase car insurance. Ideally, when you own a private car, you will have an insurance plan meant for such vehicles. The same cannot be used if you end up turning it into a commercial vehicle. When you do so, you will be required to buy commercial car insurance. What is commercial car insurance? How is it different from insurance for private use cars? How do you shift from private car insurance to a commercial one? Let’s find out.

Commercial insurance for cars

If you own or have owned a car, or know anything about buying insurance for one, you may know that there are various types within this broad insurance category. One of the ways to differentiate between various insurance policy types is on the basis of their scope. For example, one of the most basic types of car insurance is ‘third-party liability insurance’. The most wide-ranging car insurance plan is known as ‘comprehensive car insurance’. This usually includes a range of policy sub-types, including third-party liability policy, as well as own damage cover, zero depreciation add-on, and more. The other way that car insurance plans can be classified is on the basis of the type of vehicles they cover. For example, a car owned by an individual for personal use will need a private car insurance policy. However, an individual may also choose to buy a car and put it to commercial use in a cab service agency or for rentals. When such is the case, it would not be right to buy private car insurance. It would not provide the right insurance for your car. Moreover, it may not be considered valid. Instead, you ought to choose commercial car insurance if your car is used for commercial purposes. If you choose a comprehensive commercial car policy, you may get various types of coverage, such as third-party liability cover, accident cover, and more. Alongside damages to the vehicle and cover for the owner of the vehicle, such policies may also be additionally equipped to cover the drivers of the car against accident or fatality. When buying such a policy, it is ideal to indulge in some research to find the policy that suits you best. While most policies tend to be more or less similar, there may be a few features that may differ slightly. Moreover, the premium rates offered by different policies may also be different. You can use the car insurance calculator of different policies to check how much you will be required to pay for each of them. You can choose the policy you like based on the premium rates as well as the features and benefits offered. So, which policy should you get – private or commercial car insurance? The answer to this is quite simple. The type of policy you should get depends entirely on the purpose your car is being used for. If your car is being used to ferry people, transport goods, or for the purpose of any such services that you earn money from, it ought to be categorised as a commercial use car. Hence, you will be required to buy commercial insurance for your car. * Standard T&C Apply

Converting private car policy to commercial insurance

You will need to have a commercial car insurance policy if you are choosing to either buy a vehicle for commercial purposes or convert your existing private car into a commercial vehicle. If the latter is the case, you cannot directly proceed with getting your insurance. You will first have to complete the process of converting your vehicle registration from private to commercial. This process is a fundamental requirement. It can be initiated online, but you may need to visit the RTO to complete the process. Once this process is completed, you can move on to the insurance part. You will now need to buy a new commercial insurance policy to cover your vehicle, to suit its new categorisation. Note that you will not be able to convert your existing private insurance policy to a commercial car insurance policy. It is necessary to use the car solely for the purposes it is registered for. It is not ideal to use a private car for commercial purposes. If doing so, it is important to register the same with the authorities. To ensure that your formalities are complete, it is also necessary to get the right car insurance. * Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.