Taxi insurance explained in details
Taxis are the means of public transport that help you travel from one place to another if you don’t own a vehicle or if your vehicle is otherwise unavailable for commuting. Taxis are commercial vehicles, also called Passenger Carrying Vehicles (PSVs). Thus, they have to fulfil the traffic rules and regulations to run on Indian roads. Under the provisions of the Motor Vehicles Act, 1988, taxis in India should carry a valid insurance policy before they commute on the road and/or carry passengers. This is where a taxi insurance policy comes into the picture.
What is taxi insurance?
Taxi car insurance is a commercial vehicle insurance policy available for vehicles used commercially to transport passengers. The policy is issued by general insurance companies and should be bought by taxi owners before they use their taxis for transportation purposes.
Features and benefits of taxi insurance
A taxi car insurance policy has various features and benefits. Some of these are mentioned below –
- There are two types of insurance plans available for insuring a taxi – a third party liability cover and a comprehensive package policy.
- Third-party coverage is mandatory as per law. It protects you against legal liabilities suffered if any third party suffers a financial loss due to your taxi
- Comprehensive taxi insurance plans provide an all-round coverage for third party legal liability as well as for the damages suffered by your car
- A comprehensive taxi car insurance policy also provides different types of add-ons for enhancing the scope of coverage
- The taxi driver also gets coverage against accidental death and disablement under the personal accident cover available with the plan
- You can buy or renew taxi insurance online in simple steps
- Cashless claims are available at networked garages
Reasons to buy taxi insurance
Under the Motor Vehicles Act, a minimum of third-party liability commercial vehicle liability insurance is required by every individual or owner who owns a taxi, hence taxi insurance is necessary.
Apart from that, taxi insurance ensures the protection of both you and your customer in the event of loss or damage occurring due to an accident or collision.
If you invest in a comprehensive plan, you can also increase the protection by increasing add-ons like CNG kit cover, zero depreciation cover, and more. It is now easy to invest in taxi insurance from the comfort of your house/ workplace with the availability of online motor insurance plans.
What is Insured Declared Value?
IDV stands for Insured Declared Value, and it is the maximum sum assured set by the insurer in the event of a vehicle`s theft or total loss. In a nutshell, IDV refers to your vehicle`s current market worth. It’s normally calculated using the manufacturer’s suggested retail price for the model and version of the vehicle at the start of the policy. It is calculated after depreciation has been adjusted for each year as suggested by Indian Motor Tariff.
The car insurance claim amount payable is computed based on IDV if your four-wheeler is stolen or damaged to the point of being beyond repair. As a result, your vehicle must be insured against the appropriate IDV.
Types of taxi insurance in India
As mentioned earlier, there are two types of taxi car insurance plans available in India. They are detailed below –
- Third-party liability policy
This policy is the basic mandatory cover required as per the Motor Vehicles Act, 1988. The policy covers financial liabilities suffered in case of death, injury or property damage suffered by another individual.
- Comprehensive taxi insurance
A comprehensive policy has two coverage components. The first is the mandatory third party liability coverage. The second is the own damage cover that covers the damages suffered by the insured taxi.
Inclusions in taxi insurance
The instances covered under a taxi car insurance policy depend on the type of policy that you buy. Coverage under the mandatory third party cover includes the following –
- Financial liability faced for causing a physical injury to a third party where the insured taxi is at fault
- Financial liability faced for causing death where the insured taxi is at fault
- Financial liability faced for causing third party property damage where the insured taxi is at fault
Under the own damage component of the coverage, available under comprehensive taxi insurance plans, the following instances are covered –
- Damage to the taxi due to natural calamities like earthquakes, hurricanes, cyclones, landslides, lightning, etc.
- Damages to the taxi due to man-made calamities like riots, fire, self-explosion, strikes, malicious acts, etc.
- Theft of the taxi
- Damages to the taxi when it is being transported to another place through air, road or water
Moreover, a personal accident cover is also available for the driver/owner of the taxi. This cover is mandatory and covers the driver against accidental death or disablement. However, if the driver has a personal accident cover on his/her life, you don’t have to buy the cover again with the taxi insurance policy.
Exclusions in taxi insurance
There are some instances of loss that a taxi insurance policy does not cover. These instances include the following –
- Depreciation and normal wear and tear of the taxi
- Mechanical or electrical failure or breakdown
- Any type of consequential loss
- The loss suffered when driving without a valid license
- The loss suffered when driving under the influence of alcohol or drugs
- The loss suffered when driving outside the territory of India
- The loss suffered when using the taxi in violation of its limitations
- The loss suffered when your taxi insurance policy has expired
- The loss suffered when engaging in a criminal act
- Deliberate losses
Add-on covers under taxi insurance
A comprehensive taxi car insurance policy allows a range of add-on coverage benefits that help in enhancing the scope of coverage. These add-ons are available at an additional premium and you can add as many add-ons that you want. Some of the most popular add-ons available with taxi car insurance are as follows –
- Zero depreciation cover
This is, by far, one of the most important add-ons covers that you can opt for. This cover eliminates the deduction for depreciation at the time of claims. Since depreciation is not covered under the insurance plan, your claims get reduced considerably due to the depreciation on the repaired or replaced parts. However, if you have the zero depreciation cover, the insurer pays the full claim amount, without deducting depreciation.
- Personal accident cover for named individual
You can opt for an optional personal accident cover for any driver other than yourself if the taxi is used by someone else too.
- Emergency assistance
In case your taxi breaks down in the middle of the road and cannot be towed to the nearest garage, you can opt for the emergency assistance add-on. Under this add-on, you get accommodation as well as a transportation facility.
- Return to invoice cover
Under this add-on, if your taxi is stolen or damaged beyond repairs, you get the invoice value of the taxi as claimed and not the policy’s Insured Declared Value (IDV).
- Engine protection cover
If the engine of your taxi gets damaged due to water seepage, such damages would not be covered under a basic taxi insurance policy. To get this coverage, you can opt for this add-on.
- Key replacement cover
This add-on provides coverage for lost key replacement.
- Electrical accessories cover
The electrical accessories of the taxi are insured against damages under this add-on.
Optional covers under taxi insurance
Though add-ons under a comprehensive policy are available as optional add-ons, there are other coverages features too that you can add to the policy if needed. These optional covers include the following –
- Coverage for the bi-fuel kit if you add one to the taxi
- Coverage for additional accessories added to the taxi that did not come factory built into the vehicle
How to compare taxi insurance online?
Many leading general insurance companies offer taxi insurance policies. To find the best coverage, you should compare taxi car insurance online and then buy. So, here’s how you can compare taxi insurance online –
- The coverage benefits
Though most taxi insurance plans offer standard coverage benefits, some plans add attractive coverage benefits to the inbuilt coverage for a wider scope of protection. For example, you can avail yourself of the free towing facility or emergency roadside assistance inbuilt under some plans. So, the first thing that you should check is the coverage benefits offered and buy a plan with the widest scope of cover.
- The Insured Declared Value (IDV)
The IDV of a taxi car insurance policy is the market value of the vehicle after deducting depreciation based on the vehicle’s age. The IDV determines the maximum claim payable under the taxi insurance policy. So, when comparing taxi insurance online, you should try and opt for an IDV as close to the market value for maximum claim settlement.
- The premium charged
The premium is another important criterion that should be checked when comparing taxi car insurance online. Try and opt for a plan that offers the lowest premium rate without compromising on the coverage benefits.
- The add-ons offered
Compare taxi insurance plans on the basis of the range of add-ons they offer. The wider the range of add-ons the more flexibility you can avail of for customizing the coverage as per your needs.
Comprehensive taxi insurance plans allow premium discounts for multi-car insurance, for choosing a voluntary deductible, for fitting safety devices in the vehicle, etc. Look for the discounts and choose a plan offering the maximum discounts.
- Claim process
Nowadays, companies have eased up their motor insurance claim process to make their policies customer-friendly. Look at the claim process of different insurers and choose one that offers the simplest settlement process.
- Garage network
Networked garages allow cashless claims and so an insurer with the widest network of garages should be preferred for easy cashless claims.
Compare taxi insuranceonline keeping the aforementioned points and you would be able to find the best plan for your coverage needs.
How to buy taxi insurance?
You can buy a taxi insurance policy in two ways. They are as follows –
You can get in touch with an insurance agent or broker and buy a taxi insurance plan. You can also visit the branch of an insurance company that sells taxi insurance and apply for a policy by filling up a proposal form for availing of coverage. Pay the premium and submit the proposal form. The insurance company would assess the form, accept the premium and issue the taxi car insurance policy.
An alternative and more convenient way to buy taxi insurance is the online mode. You can visit the website of the insurance company, provide the details of your taxi and buy the plan online. You can also choose to buy the taxi insurance policy through an aggregator’s website wherein you get the benefit of comparison. You can check out the different taxi insurance plans available in the market, compare them and then buy the most suitable policy.
Turtlemint also offers taxi insurance online from the leading general insurers of India. You can compare leading plans and then choose the best policy for your vehicle. Just visit https://www.turtlemint.com/car-insurance/, enter your car details and find the leading plans. Compare the plans, pick one and make an online payment of the premium. The taxi insurance policy would be issued instantly.
How to renew taxi insurance?
Just like buying, renewing the taxi insurance policy can also be done in the following two ways –
- Offline renewals
Get in touch with your agent or broker or visit the insurance company’s branch and renew the policy offline.
- Online renewals
Visit the website of the insurance company from where you bought the policy. Choose the renewal option, enter the policy number, pay the renewal premium and renew taxi car insuranceonline. If you have bought the plan from Turtlemint, you can log into your online Turtlemint account and renew the policy from there itself. You can also port to another taxi insurance policy at the time of renewals. You can check the different taxi insurance plans available on Turtlemint’s website and renew with a different plan if it offers better coverage at low premiums.
How to make a claim under taxi insurance?
If you incur any claim in your taxi insurance plan, inform the insurance company immediately. The claim process is as follows –
- For your own damage claims, the insurance company would guide you to the nearest networked garage. You can also check the garage list online on the company’s website or mobile application.
- Take your taxi to the garage where the insurer’s surveyor would come and assess the extent of damages. The surveyor would also prepare a claim estimate and submit the same to the insurance company.
- The company would approve of the claim based on the surveyor’s estimate
- Once the claim is approved, the garage would repair your taxi and the bills would be settled by the insurance company.
- Pay the deductibles and non-admissible expenses to take delivery of your vehicle. You should also file a claim form and submit the relevant documents for claim settlement.
- In the case of third party claims, you would have to file a police FIR. The claim would be handled and settled by the motor accidents tribunal. Once the tribunal gives its ruling, the insurance company would directly pay the claim to the third party.
- If your taxi is stolen, you would again have to file a police FIR. If the police are unable to trace your vehicle, they would issue a certificate certifying the same. Submit this certificate with the insurance company to get a settlement of your claim.
- In the case of your own damage claims, if you get your vehicle repaired at a networked garage, you would have to bear the repair charges yourself. Once the repairs are done, file a claim with the insurance company and the company would reimburse you for the costs incurred.
For claim settlement, you would have to submit the following documents –
- The policy bond
- Copy of the RC book of the taxi
- Copy of the driving license of the driver riding the taxi at the time of claim
- Identity proof of the policyholder
- Police FIR for theft and third party claims
- Medico-legal certificate for personal accident claims
- All repair bills in original in the case of reimbursement claims
- Any other document as required by the insurance company
If you have bought the taxi insurance policy from Turtlemint, you can call 1800 266 0101 or send a mail to email@example.com. Turtlemint’s claim department would help you get your claim settled at the earliest.
To understand what taxi insurance is all about and then buy a suitable policy for your vehicle.
Frequently Asked Questions
- How is the third party premium calculated for the taxi insurance policy?
The third-party premium of a taxi insurance policy is calculated by the Insurance Regulatory and Development Authority of India. It is fixed and reviewed every financial year. For taxis, the premium depends either on the engine capacity of the vehicle or the number of passengers the taxi is licensed to carry.
- What is the applicable depreciation on the parts of the taxi?
The depreciation depends on the different parts. It is as follows –
Parts of the taxi
Applicable depreciation rate
Nylon, rubber or plastic parts of the car
Fibreglass parts of the car
Glass parts of the car
- Do I get any discount if I do not make claims under my taxi insurance policy?
Yes, if you do not make claims on your taxi insurance policy you can claim a no claim discount. This discount starts from 20% for the first claim-free years and goes up to 50% if you have five successive claim-free years.
- What details of the taxi would be needed when buying taxi insurance online?
When buying taxi car insurance online you would have to provide the following details to the insurance company for calculating the optimal IDV as well as the premium amount –
- The make, model and variant of the taxi
- The year of manufacture
- The year of registration
- Registration location
- Additional accessories added to the taxi if any
- The engine and chassis number
After these details are correctly entered the insurance company would calculate the IDV and the corresponding premium for the comprehensive taxi insurance policy.
- What are deductibles in the taxi insurance plan?
Deductibles are your out-of-pocket expenses. In the case of a claim, the insurance company pays the claim only if it exceeds the deductible limit. Claims up to the deductible would have to be borne by you. There are two types of deductibles in taxi insurance plans. One is the compulsory deductible which is mandatorily applicable at each instance of a claim. The other is the voluntary deductible which you can choose yourself for availing of a premium discount. If you choose a voluntary deductible, you would have to pay the compulsory deductible as well as the voluntary deductible amounts from your pockets and the insurance company would pay the rest of the admissible claim.