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All You Need to Know About Auto Rickshaw Insurance

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An auto rickshaw insurance is a type of commercial vehicle insurance that provides financial protection to auto rickshaw owners against damage/loss incurred due to accidents and natural calamities.

All You Need to Know About Auto Rickshaw Insurance

Types of Auto-Rickshaw Insurance Policies

There are two types of commercial insurance policies for auto rickshaws:

  1. Liability-only policy: Liability-only policy is third-party insurance that protects auto rickshaw owners from third-party liabilities arising out of the insured auto. It covers third-party damages along with the death and disability of the third party in an accident caused by the insured auto.
  2. Comprehensive Policy: It covers both third-party liabilities and damages to the driver as well as the insured auto.

Is it Mandatory to Buy Auto Rickshaw Insurance?

As per the Motor Vehicle Act Law, it is mandatory for all auto-rickshaw owners to buy at least a third liability insurance for their auto-rickshaws.

What is Covered in Auto Rickshaw Insurance?

Damage/loss caused to the insured vehicle: A policy will cover loss/damages caused to the insured auto arising out of

  1. Fire, lightning, and explosion
  2. Burglary and theft
  3. Natural calamities like flood, storm, typhoons, etc.
  4. Other damages as mentioned in the policy document

Third party liabilities: The policy will cover the following damages:

  1. Body injury to the third party
  2. Death of the third party
  3. Property damage of the third party
Also Read:  Commercial Vehicle Insurance

Towing disabled vehicles: Damages caused to the insured auto in cases where it’s being towed are covered in the policy.
Personal accident cover: Death or injury caused to the auto-rickshaw driver by an accident of the auto-rickshaw provided, the driver must be the registered owner of the vehicle, and he must possess a valid driving license.

Note: In a liability-only policy, only third-party liabilities are covered.

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What are the Exclusions of Auto Rickshaw Insurance?

  1. Driving an auto rickshaw under the influence of alcohol
  2. Driving an auto-rickshaw without a valid driving license
  3. Deliberate attempt to make a claim
  4. Negligence by the auto-driver
  5. Auto rickshaw used for an unauthorized purpose- not using it in accordance with “limitation as to use”.
  6. In a liability-only policy, own damages are excluded.

There can be more exclusions to the commercial auto insurance policy, hence read the terms and conditions carefully.

Comprehensive Policy vs Liability-Only Auto Rickshaw Insurance

ParametersLiability-Only PolicyComprehensive Policy
MandatoryYesNot mandatory but is recommended
CoveragesDeath, bodily injury and property damage of the third personCovers damages caused to the insured auto and its owner + third-party liabilities  
PremiumFixed by the IRDAI and cost is comparatively lesserHigher premium (depending upon the coverages)
CustomizationCannot be customizedCan be customized by paying an extra premium

Decide what type of coverage you want for your auto-rickshaw. If you want to cover damages related to third-party only, then opt for a liability-only policy.

However, if you wish to cover own damages along with the third-party cover, go for a comprehensive policy for your auto rickshaw.

Also Read:  IRDAI Allowed Add-Ons to Motor Own Damage (OD) Policy

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