Motor insurance is a mandatory requirement for all vehicles plying on Indian roads. As per the Motor Vehicle Act of 1988, it is compulsory to have at least third-party insurance coverage to protect against any liability arising from third-party damages.
However, when it comes to commercial vehicles, such as trucks, taxis or delivery vans, the rules may differ slightly. In this blog post, we will explore whether it is possible to add a paid driver to a commercial third-party motor insurance policy.
Understanding Third-Party Motor Insurance
Third-party motor insurance provides coverage against legal liability for any damage caused to a third party due to an accident involving your vehicle. It covers the liability for injuries, death or property damage caused to others. However, it does not provide coverage for the damages to your vehicle.
In simple terms, it protects you against the financial consequences of any damage you cause to someone else's property or person.
Can a Paid Driver be Added to a Third-Party Motor Insurance Policy?
Typically, a third-party motor insurance policy does not allow the addition of paid drivers to the policy. This is because the policy primarily covers the owner's liability for any damage caused by the vehicle.
Since a paid driver is an employee or hired personnel, their liability falls under the responsibility of the owner of the vehicle. Therefore, it is not necessary to add them separately to the policy.
In such cases, the liability for any damage caused by the paid driver will be covered by the owner's third-party motor insurance policy. As a commercial vehicle owner, you must ensure that your paid drivers are competent, skilled, and possess a valid driving license to minimise the risk of accidents and subsequent liabilities.
Implications of Adding a Paid Driver
Adding a paid driver to a comprehensive cover can have certain implications, such as:
Policy Terms: Insurance companies may have specific terms and conditions regarding the inclusion of paid drivers. Some policies may allow it without any additional charges, while others may require adjustments to the premium.
Driver Information: It is essential to provide accurate details about the driver. This includes their driving license information and any relevant driving history. Failure to disclose accurate information may result in claim rejections or policy nullification.
Insurer Approval: Some insurance providers may require the paid driver to meet certain criteria or obtain approval before they can be added to the policy.
Coverage Limitations: Adding a paid driver to a commercial third-party motor insurance policy does not provide coverage for the driver's injuries or damages to their property. These aspects are typically covered under the driver's motor insurance policy.
Key Considerations
Consult the Insurance Provider: If you are considering adding a paid driver to your comprehensive insurance policy, it is advisable to consult the insurer first.
Review Policy Documents: Thoroughly review the policy documents. Understand any limitations, terms, or additional charges associated with adding a paid driver. This will help you make an informed decision.
Maintain Accurate Records: It is essential to maintain accurate records of the paid drivers associated with your commercial vehicle. This includes their licenses, driving history, and any changes in their employment status.
Importance of Insurance for Commercial Vehicles
If you own a commercial vehicle, such as a delivery bike or a cab or an autorickshaw, it is essential to have comprehensive insurance coverage. Unlike third-party insurance, comprehensive insurance provides coverage for both third-party liabilities and damage to your own vehicle.
This coverage is particularly important for commercial vehicles because any damage or loss can lead to significant financial setbacks for your business.
Third-Party vs Comprehensive Car Insurance
Here's a detailed comparison of third-party and comprehensive car insurance:
Parameter | Third-Party Liability Cover | Comprehensive Cover |
Meaning | Mandatory car insurance policy to cover third-party liabilities and comply with the law. | Insurance policy that offers enhanced coverage in the form of own damage insurance cover. It also includes the cover offered by the third-party liability plan. |
Add-on Availability | No | Yes |
Compulsion | Compulsory | Not compulsory |
Coverage | Covers damages caused to another individual or their property due to the insured car. | In addition to third-party liability coverages, it also covers theft, damage from man-made or natural calamities, etc. for your car. |
Is It Enough? | No, as the insured car is still exposed to 'own damage' risks. | Yes, as this is a comprehensive policy and can be customised with add-ons. |
Premium | Priced lower due to its limited coverage. | Higher cost due to its wider coverage. |
Rates | Fixed by the Insurance Regulatory and Development Authority of India (IRDAI) based on the car engine's cubic capacity. | Fixed by the insurer as per the terms and conditions of the policy. |
Discounts | No discounts available. | Discounts in the form of anti-theft devices, voluntary deductibles, and no-claim bonuses available. |
Conclusion
When it comes to commercial third-party motor insurance policies, the inclusion of a paid driver is generally not required. The owner of the vehicle assumes the liability for any damages caused by the paid driver. However, it is important to note that this may vary depending on the specific terms and conditions of the insurance policy.
Additionally, if you own a commercial vehicle, it is recommended to opt for comprehensive insurance coverage.
Remember, motor insurance is a crucial aspect of responsible vehicle ownership. It is always wise to choose the policy that best suits your needs and offers adequate protection.
