If you are a business owner, it doesn’t matter whether you have a small or large setup, or whether you have a single vehicle or a fleet of cars for business purposes; what’s important is getting commercial vehicle coverage.
You see, in the Philippines or anywhere in the world, trucks, pickups, delivery vans, and the like are the lifeline of most businesses. They help in bringing and delivering cargo or goods, thus supporting the economy. However, as we all know, the condition of our roads, the unpredictability of the weather, and high accident rates - the risk of operating a vehicle, especially a commercial one, is substantial.
What's the solution? Well, that comes in the form of truck vehicle insurance. This practical tool not only protects your vehicle but also safeguards the business. So, whether you are a large logistics company or a small delivery company, with the right insurance by your side, you can ensure peace of mind and financial stability.
In this article, we have discussed the top risks covered by truck and commercial vehicle insurance, which gives you all the reasons to get it right away. So, let’s get started -
Commercial vehicle insurance - Getting to know the basics
What is commercial vehicle insurance, and who needs it?
Commercial vehicle insurance is designed to protect the vehicles used for business purposes. When you obtain commercial vehicle insurance, you not only safeguard the vehicle itself from damage due to various factors, such as collision or accident, but also the cargo, co-passengers, driver, and third parties.
Unlike private car insurance that is designed specifically for units owned for personal use, this one takes care of vehicles like trucks, vans, and fleet units used for the transportation of cargo, passengers, and logistics.
If you fit in any of these categories, you need commercial vehicle insurance -
- Small business with pickups and vans for deliveries
- Logistic and trucking company
- Construction firm with multiple trucks
- Courier and e-commerce service firm
Also Read: Car insurance endorsements simplified: A guide to smarter coverage
Top risks covered by truck insurance in the Philippines
Photo from ShutterstockTheft & vehicle loss
Do you know that in the Philippines, commercial vehicles are one of the prime targets of robbery? With insurance on your side, you could rest assured as if you weren’t facing complete financial loss.
Accident & collision
As mentioned above, road accidents and collisions are common in the Philippines. God forbid, if your vehicle gets involved in an accident or collision, your insurance will cover the repair costs, as well as the medical expenses for the injuries sustained. However, without insurance, everything will fall on your shoulders.
Natural disaster
The Philippines is no stranger to natural calamities, be it an earthquake, flood, typhoon, or volcanic eruption. With insurance around, your commercial vehicle is protected against such disasters and the associated repair costs.
Third-Party coverage
Suppose your truck or delivery van hits a third party or their property on the road. In that case, commercial insurance will ensure that all third-party liabilities are taken care of—no need to pay anything from your pocket.
Fire damage
An explosion or fire, caused by an external factor or mechanical failure, severely damages commercial vehicles. However, with comprehensive insurance, you are protected against financial loss in the event of such unfortunate instances.
Driver and passenger injury protection
For any business that owns commercial vehicles, its drivers and passengers are the backbone of the company. In case of an accident, insurance covers their medical and hospital expenses.
Damage to cargo & goods
Commercial vehicles are designed for a specific purpose, helping to transport goods and cargo from one point to another. If items in transit are damaged or lost, companies incur losses and may even lose the trust of their customers. Some insurance policies are designed to protect against such damages.
Additional coverage for extra protection
Insurance is all about protection, and it is challenging to encompass all that commercial insurance has to offer under one heading. Here are a few additional benefits/protection that a policyholder gets to enjoy.
Coverage against vandalism, riots, and strikes: Unseen and unfortunate events, such as strikes, terrorist attacks, and vandalism, can cause massive damage to life and property, including your commercial vehicles. You can customise your policy to receive protection from such events and the associated costly repairs.
Roadside assistance: Imagine your truck breaks down mid-transit or your delivery van runs out of fuel along the way. In such situations, having roadside assistance by your side is super helpful as the service providers handle everything and ensure the business is back on track.
Personal accident coverage: This one is a critical protection for businesses that carry passengers as part of their operations or have drivers and co-drivers on board. It offers compensation in case of injuries or death to the family.
Commercial vehicle insurance: Top benefits to business owners
Ensuring business continuity: Commercial vehicle insurance ensures that your business operates smoothly with no delays in delivery. How? By taking care of all the repair and replacement work.
Reduced financial burden: Unfortunately, incidents like accidents can drain a business of its finances. With a proper insurance plan, everything from repair to medical bills is taken care of, thus preventing sudden disruption in the budget.
Boosts client trust: It is a given that a business with proper insurance in place makes clients feel more secure and confident. This showcases your professionalism and strengthens the market reputation.
What’s the cost?
What is the cost of truck and commercial vehicle insurance in the Philippines? The answer to this question depends on several factors, including the type of commercial vehicle (truck, van, pickup, motorcycle, etc.), usage (delivery, passenger transport, logistics), the age & condition of the unit, the driver’s record & driving experience, and coverage.
For instance, the average annual third-party insurance rates for commercial vehicles are around PHP 650 to PHP 1,000. Comprehensive insurance, on the other hand, costs PHP 15,000 to PHP 50,000 or more per year, depending on the factors mentioned above.
Also Read: Why every truck business needs Comprehensive Truck Insurance in the Philippines
How to get insurance for your commercial vehicle?
Here is a step-by-step guide to buying commercial vehicle insurance -
Step 1: Assess your needs
First and foremost, assess your business activities to determine how involved the vehicles are, the nature of the work, and the routes they travel, among other factors. All this will help you decide whether CTPL insurance is sufficient or if comprehensive coverage is necessary.
Step 2: Compare providers and their quotes
This is one of the most crucial steps if you want to ensure you have the best offer in hand. For this, you first need to shortlist all the commercial vehicle insurance providers certified by IC. Next, compare multiple providers based on quotes, coverage, customer service, and claim process.
Step 3: Read the fine print
Before signing and after receiving the policy, make sure to review the terms, details, inclusions, and exclusions carefully. In the event of any discrepancy or confusion, please contact the provider as soon as possible.
Key tips while getting commercial vehicle insurance
- Do not overlook cargo insurance, particularly if your company handles the transportation of valuable items.
- While buying insurance, don’t just look for a low premium. Optimum coverage will ensure proper protection.
- Ensure that you update your policy in the event of a vehicle modification or the purchase of a new one.
- List vehicle usage properly to the insurer for claim approval.
Also Read: Don't panic after an accident — Here's how to file a comprehensive claim
Bottom line
Running a business comes with its own risk; no, we are not talking about the risk of failing to make sales and losing your investment. We are discussing the potential for damage or loss of your business vehicles, such as trucks, vans, or delivery vehicles, in the event of an accident, collision, natural disaster, fire, or vandalism. While nothing can ensure your business's success, commercial vehicle insurance can surely save you from unplanned repairs, replacements, and medical bills.
So, invest in truck and commercial vehicle insurance and protect not only your fleet but also the smooth flow of your business operations and its reputation.
FAQs
Q1. How often shall I review my insurance policy?
Ans. Make it a point to review your commercial vehicle insurance at least once a year, upon renewal, or whenever you add a new vehicle to your fleet.
Q2. What are the reasons for a truck insurance claim getting denied?
Ans. It can be denied for the following reasons: late reporting, vehicle usage exceeding the agreed-upon terms, the driver being without a license, or the driver being under the influence.
Q3. Are goods/cargo automatically covered under commercial vehicle insurance?
Ans. No. If you require coverage for goods/cargo, add the necessary add-on.
Q4. I am selling my truck. Can I transfer the commercial vehicle insurance policy?
Ans. Yes, however, ensure that the new owner gets in touch with the insurer and updates all relevant documents.
Q5. How do I file a claim for commercial vehicle insurance?
Ans. First, report the incident to the local authorities, take pictures of the damage, gather the required documents, and submit them along with the duly accomplished claim form.
Q6. What are the consequences of the expiry of the insurance policy?
Ans. After the expiry of the insurance plan, you won’t be covered against any type of risk; you may have to face penalties and even legal consequences.
Q7. What documents are required for applying for commercial vehicle insurance?
Ans. Typically, a prospective client requires a vehicle’s OR/CR, a business permit, vehicle license, and a duly completed form.
Q8. Does commercial vehicle insurance cover drivers and passengers?
Ans. Yes, given that you have opted for a comprehensive insurance plan with personal accident coverage.
Q9. What if my truck gets stolen? Will insurance help?
Ans. Yes, with the right insurance plan (comprehensive theft coverage), you’ll get compensation equal to the vehicle’s insured value.
Q10. Does commercial vehicle insurance cover damage against floods & typhoons?
Ans. Yes, but for that, your plan must include coverage for Acts of God.
Q11. Can I use personal car insurance for my business vehicle?
Ans. No, this will not provide the required coverage, and there is a risk that your claim may be denied and your policy could be cancelled.
Q12. What is the cost of commercial vehicle insurance in the Philippines?
Ans. While the cost varies from insurer to insurer and depends on several factors, it ranges from PHP 650 to PHP 50,000 annually.
Also Read: Truck/Commercial Vehicle Insurance 101: What Filipino business owners need to know
