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Private Vs Commercial Car Insurance: Understanding The Difference

by Jocelyn

Cars are indispensable for their convenience and mobility, serving various purposes, from daily commutes to collections or income. What unites all car owners is the need for car insurance, regardless of the fuel type, model, or purpose. Motor insurance offers financial protection against accidents, natural disasters, or man-made events. It comes in two categories: private and commercial, each offering different coverage scopes.

What Is Private Car Insurance? 

Private Car Insurance, particularly comprehensive plans, offers extensive coverage for personal vehicles. It combines third-party liability and own damage insurance, providing robust protection. If you have questions about the cost of insurance, you can use a car insurance calculator. It helps you estimate the insurance prices you need to pay. Here’s the coverage information:

  • Provides monetary compensation for losses or harm caused by mishaps, regardless of fault.
  • It protects you from various unfortunate situations, such as calamities caused by nature or humans.
  • Incorporates protection against third-party liabilities.
  • In the unfortunate event of an accident leading to physical injury or passing away, the owner-driver may have personal accident insurance coverage. Claims are subject to terms and conditions set forth under the motor insurance policy. *

There are a few exclusions even though comprehensive private car insurance provides comprehensive coverage for personal vehicles. Among these exclusions are:

  • Vehicles used for business or commercial purposes are typically not covered.
  • Usually, it includes the owner-driver. However, if you frequently let someone else drive your car, you must ensure that personal drivers have additional insurance. Claims are subject to terms and conditions set forth under the motor insurance policy.

How Does Commercial Car Insurance Work? 

Insurance coverage is vital for commercial vehicles like taxis and cabs due to unique risks. Commercial motor insurance is tailored to protect vehicles used for business purposes. It covers various aspects of your business, including drivers, passengers, and financial protection for vehicle damage. Here are the coverage details:

  • It provides financial security for your company if mishaps damage the company vehicle. Repair and replacement costs may be covered, minimising the impact on your company’s operations.
  • It may offer protection against total loss brought on by a fire, a theft, or a natural disaster. 
  • The driver’s personal accident insurance may be included. The policy may offer financial support for medical costs, disability benefits, or compensation if the driver is killed or suffers bodily harm, protecting their well-being and financial stability.
  • The choice to include passenger cover is frequently available. In an accident, passengers’ financial security may be ensured by this extra coverage.
  • Third-party liability coverage may be a part of it. It protects your company from potential monetary and legal liabilities brought on by mishaps involving your company car. You can use a commercial vehicle insurance premium calculator to estimate the premium prices. Claims are subject to terms and conditions set forth under the motor insurance policy. *

Even though commercial vehicle insurance offers extensive coverage for businesses using commercial vehicles, there are some specific exclusions. These exclusions list the situations or occurrences the insurance policy does not cover. The following are some typical exclusions:

  • In most cases, personal use of the vehicle may not be covered.
  • Damages brought on by normal wear and tear over time may not be covered. 
  • Usually, the insured vehicle’s electrical or mechanical breakdowns may not be covered. 
  • The coverage provided by commercial motor insurance does not extend to losses or damages brought on by catastrophes like nuclear attacks, war-related incidents, or radiation exposure. Claims are subject to terms and conditions set forth under the motor insurance policy. *

* 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.

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