A Complete Guide to Auto Rickshaw Insurance and Its Renewal Process in Indi
Pune, 22 April 2025: Auto rickshaws are a vital part of urban and rural transportation in India, offering a cheap and accessible means of conveyance to millions. With their robust use on Indian roads and exposure to risks, adequate insurance coverage for auto rickshaws is not only a legal requirement but also a necessity.
Commercial vehicle insurance covers auto rickshaws and other commercial automobiles from accidents and unforeseen mishaps.
Continue reading to discover more about auto rickshaw insurance, including its types, importance, key features, benefits, and the renewal process.
What is Auto Rickshaw Insurance and its Types?
Auto rickshaw insurance is a specialised type of commercial vehicle insurance that covers three-wheelers against accidents, theft, fire, natural disasters, and third-party liabilities. According to the Motor Vehicles Act of 1988, all auto rickshaw owners must purchase at least basic third-party liability insurance.
According to this act, a third-party person or property is compensated in the event of an accident, loss, or injury, thereby protecting both the owner-driver and the community.
Auto rickshaw insurance policies can be generally categorised into:
- Third-Party Liability Insurance: Compensates for legal exposures resulting from injuries or damage to third parties, including individuals or property.
- Comprehensive Insurance: Provides broader protection, covering third-party liability and damage to your own vehicle in the event of accidents, theft, fire, or natural disasters.
Why is Auto Rickshaw Insurance Essential?
Auto rickshaws run in high-traffic and unpredictable situations, which expose them to accidents, theft, and other dangers. Insurance helps provide necessary financial security by ensuring that owners do not have to bear hefty repair costs or legal liabilities. The main reasons why one should take auto rickshaw insurance are:
● Legal Compliance
Auto rickshaw or commercial vehicle insurance is mandatory under Indian law. Vehicles without third-party insurance are liable to face legal consequences.
● Financial Security
Vehicle insurance covers the repair or replacement of a vehicle in the event of an accident, theft, or natural disaster. Thus, auto rickshaw owners don’t have to pay for the repairs out of their own pocket.
● Passenger Protection
Most policies provide personal accident cover for passengers and drivers, ensuring overall security. Moreover, it demonstrates to your clients and passengers that you are a trustworthy and responsible vehicle owner.
● Wide Coverage
Purchasing a standard or comprehensive insurance policy is recommended if your auto rickshaw is the main component of your business. This will protect both your vehicle and the owner-driver from any losses resulting from natural disasters, accidents, terrorist attacks, fires, thefts, and other unanticipated events, including malicious acts.
What are the Key Features and Benefits of Auto Rickshaw Insurance?
Auto rickshaw insurance policies offer a variety of features and benefits. Here are some of them:
- Accidental Damage Cover: This coverage provides repair costs for incidents resulting from collisions, overturning, or other accidents.
- Theft Protection: The auto rickshaw insurance policy compensates for the vehicle if it is stolen, based on its Insured Declared Value (IDV).
- Natural Calamity Cover: It protects against damages caused by floods, earthquakes, storms, and similar events.
- Third-Party Liability: Autorickshaw insurance covers expenses if your vehicle causes injury or damage to third-party individuals or property.
- Personal Accident Cover: It compensates the owner-driver in case of accidental death or permanent disability.
- Emergency Assistance: Some commercial vehicle insurance policies offer roadside assistance, towing, and emergency medical help.
- Customisable Add-ons: It enhances coverage with optional add-ons for comprehensive financial protection.
What are the Exclusions of Auto Rickshaw Insurance Policy?
While auto rickshaw insurance provides extensive coverage, there are certain exclusions that owners should be aware of:
- Normal Wear and Tear: Regular depreciation and mechanical breakdowns are not covered under auto rickshaw
- Driving Without a Valid License: Insurance claims are not accepted if the driver does not possess a valid license.
- Drunk Driving or Illegal Activities: Damages caused while driving under the influence or during illegal activities are excluded.
- Consequential Losses: Indirect losses not directly resulting from an insured event are not covered.
- Electrical/Mechanical Failures: Unless covered explicitly by an add-on, these are generally excluded from coverage.
- Contributory Negligence: Damages resulting from the contributory negligence of the owner or driver, such as driving in a flooded area, are excluded from insurance coverage.
What are the Factors Affecting Auto Rickshaw Insurance Premiums?
Several factors influence the premium amount for auto rickshaw insurance. These include:
● Vehicle Age and Condition
Newer auto rickshaws tend to get higher premiums since their market value is greater, i.e., the potential payout by the insurer in the event of loss or theft is higher.
● Geographical Location
Regions with higher traffic congestion, increased accident frequency, or higher rates of vehicle theft have higher premiums, as they present a greater risk.
● Driver’s Profile
Insurers evaluate a driver’s age, experience, and claims history to assess their risk. Young or inexperienced drivers usually pay more.
● Coverage Type and Add-Ons
The type of coverage and add-ons also affect the premium of your auto rickshaw insurance policy. Comprehensive policies with add-on cover, such as zero depreciation or engine protection, will cost more than basic third-party liability coverage.
● No Claim Bonus (NCB)
It incentivises policyholders who have not lodged any claims in the policy term by providing a discount on renewal premiums, promoting safe driving and a claim-free history.
What is the Auto Rickshaw Insurance Renewal Process?
Renewing your auto rickshaw insurance on time is crucial to maintain continuous coverage and avoid legal penalties. The steps for online auto rickshaw insurance renewal are as follows:
Step 1: Keep your policy number, vehicle registration, and details of your previous policy handy.
Step 2: Go to your insurance provider’s official website or a trusted aggregator platform.
Step 3: Fill in your auto rickshaw details, such as registration number, model, year of manufacture, and existing policy details.
Step 4: Review and compare renewal quotes from different insurers to find the best deal.
Step 5: Select any additional covers or riders as needed.
Step 6: Review the policy terms and premium amount, and then make the payment online using a secure payment option.
Step 7: Once payment is successful, the renewed policy document is issued instantly and can be downloaded or printed for your records.
How to Choose the Right Auto Rickshaw Insurance?
Selecting the right commercial vehicle insurance policy is crucial for optimal protection. Here are some tips to follow:
- It is necessary to check the insurance provider’s reputation. Opt for insurers with a strong track record in claims settlement and customer service.
- Select comprehensive coverage and relevant add-ons tailored to your operating environment and risk profile.
- Use online tools to compare premiums and benefits across insurers for the best value.
- Before finalising the policy, understand inclusions, exclusions, deductibles, and claim procedures.
Auto rickshaw or commercial vehicle insurance is not just a legal formality but a vital shield for your vehicle, livelihood, and peace of mind. By understanding the types of policies, their benefits, exclusions, and the renewal process, auto rickshaw owners can make informed decisions and ensure uninterrupted protection for themselves and their passengers.
Stay protected, stay compliant, and keep your business moving with the right auto rickshaw insurance policy.
