Tractors and other commercial robust vehicles are indispensable in any transportation system. Tractor insurance is a type of commercial vehicle insurance policy designed to protect the tractor from any unforeseen damages and losses that could occur due to instances such as accidents, collisions, natural calamities, fires, or even thefts. While a third-party liability policy for tractors only covers damages to a third party, comprehensive insurance for tractors also covers for own damages and losses thus giving the insured person and his/her business just the right amount of coverage that he/she needs for the tractor(s).
Insurance for tractors comes in a variety of forms, depending on the type of tractor, engine capacity, and the business the policy-seeker chooses to insure with. According to this arrangement, an insurer is obligated to pay the insured a lump sum amount in the event of loss, theft, or tragedy in exchange for a premium. All tractors are required by law to be insured with tractor insurance in India.
Types of Tractor Insurance Plans Available in India
Primarily there are two types of tractor insurance available in India – Comprehensive tractor insurance that offers robust coverage and third party liability only tractor insurance. However, a comprehensive policy is not mandatory to purchase, third party liability only is compulsory for all tractor owners in the country.
Comprehensive tractor insurance in India protects both the owner and his/her tractor from third-party harm. The most useful sort of insurance is comprehensive tractor insurance. Comprehensive insurance protects the tractor in a fire, theft, or natural disaster. When compared to other types of insurance for tractors, this one is quite pricey.
Insurance for a third party:
Only the damages to a third-party person, vehicle, or property are covered by third-party insurance. Third-party tractor insurance in India does not cover damage to personal tractors. Third-party insurance is the most popular type of insurance since it is less expensive than comprehensive insurance. Theft, natural disasters, and fire are not covered by third-party insurance.
Why do you need to buy Tractor Insurance?
Tractors are strong and robust commercial vehicles but they are not immune to the road risks that they are exposed to. So, having tractor insurance is very important in the country, especially if someone is connected to any business or farm.
- If someone or his/her organization uses a tractor or multiple tractors for daily business operations, having at least a third-party liability tractor insurance is mandatory as per the Motor Vehicle Act of India. This financially covers the insured person from any losses and damages caused to a third party due to a tractor owned by his/her business.
- All businesses are prone to risks both big and small. However, if someone has an asset-heavy business with several tractors being used for business operations, then getting tractor insurance is the bare minimum one can do to protect all the tractors from their own damages and losses- both to the tractor and the driver-owner himself.
- Insuring the tractor ensures that the owner is protected against unforeseen, hefty losses thus preventing any kind of business downtime that are likely to arise during natural calamities, and fires.
- While a conventional agriculture insurance policy may cover the tractor, one should buy a separate one to cover the tractor in case of more particular hazards or ensure that high-value equipment is correctly insured.
- As this policy reduces financial burden, therefore tractor insurance is capable of giving peace of mind to the owner, so that he/she can grow the business without any hazards.
Features and Benefits of Tractor Insurance
Tractor insurance has come up with a sack full of benefits and facilities that help the owner of the tractor to safeguard not only him/herself but also the prized possession. Here is a list of key highlights and inclusions of tractor insurance.
Accidents: If the tractor suffers damages and losses due to an accident then the expenses of the repair will be covered by this policy.
Theft: Any damages and losses caused to the tractor in the case of a theft, the insurance company pays the compensation for that.
Fire: If there are any damages or losses caused to the tractor in an unfortunate case of fire then it will be covered as well.
Natural Disasters: Any damages and losses caused to the tractor due to floods, earthquakes, tsunami, floor and other natural calamities will be taken care of by the policy.
Personal Accident: The policy also covers any personal injuries or death of the owner-driver of the tractor.
Third Party Losses: It covers losses and damages caused to a third-party vehicle, property, or person due to the insured tractor, in the case of an accident or collision.
Towing Disabled Vehicles: With this policy, one can get coverage for any damages caused to the tractor in cases where it is being towed.
What are the exclusions of Tractor Insurance?
Prior to buying a tractor insurance plan, one needs to know what gets covered and what is not. Insurance plans always have certain exclusions to the coverage offered. Complete knowledge will help the insured person to have a better understanding of how the tractor insurance plan works. To that effect, let us take a look at some common exclusions in the standard tractor insurance plan.
- Own Damages for Third-Party Policy Holder – If someone is only going to go for a Third-Party Commercial Insurance for the tractor, then own damages and losses won’t be covered.
- Absence of a valid driving license – If the incident occurs in the absence of a valid driving license or without a valid registration certificate of the tractor, the claim will not be accepted.
- Under any influence – If the driver of the tractor meets an accident while he/she is under the influence of drugs, alcohol, or any other intoxicating substance, the company will offer no compensation.
- Contributory Negligence – Any damages or losses caused to the tractor due to contributory negligence will not be covered. For example, if there are existing floods in the city, and one still drives the tractor despite that.
- Consequential Damages – Any damages or losses that are not a direct result of an accident, natural calamity, or fire cannot be covered.
- Accidents outside geographical limits – No claims can be made for accidents that occur outside the geographical limits that have been outlined in the policy.
- Mechanical or electrical breakdown – Mechanical and electrical breakdown of the insured vehicle will not be covered in tractor insurance unless it is taken as an add-on cover.
- Unlawful reasons – If the vehicle was being used for any illegal activities at the time of the accident, the claim will not be accepted.
- Wrong information – If the insurance company suspects foul play, the claim request might get rejected. If the narration of the event does not match the damages to the tractor, the insurer might do some investigation to find out the truth and if it turns out to be a fraudulent claim, the insured person might even lose his/her insurance plan altogether, and not only the claim amount.
- Without proper intimation – If the tractor owner gets the insured tractor upgraded without intimating the insurer, the claim may get rejected as the insurance policy covers only those tractor parts that are specified in the plan.
- Wilful act – Any damage which is clearly caused by the negligence of the owner or the driver, or as a result of a deliberate act, then the owner would have to pay for it from his/her pocket.
What are the add-on covers available under Tractor Insurance?
Commercial tractor insurance has come up with a pile of additional cover to make the policy stronger and to offer overall protection. These add-on covers can be obtained by paying a little extra premium. Some of the important mentions are as follows.
- Bumper-to-bumper cover – It provides complete coverage to the insured tractor irrespective of the depreciation of its parts. It is also known as Nil Depreciation or Zero Depreciation cover. With this add-on cover, if the tractor sustains any damage or loss due to an accident or a mishap, the insurance company will not deduct the value of depreciation from the coverage (excluding tires and batteries).
- No Claim Bonus (NCB) Cover – It is a type of reward offered by the tractor insurance company to the policyholder on the own damage (OD) premium amount for not raising any claim during the policy term. NCB is a discount on the tractor insurance premium that the insured person can avail of at the time of renewal of his/her tractor insurance policy. The NCB discount percentage ranges between 20%-50% depending on the number of claim-free years.
- Return to invoice cover – It covers the gap between the insured declared value and the invoice value of the insured tractor along with the registration and other applicable taxes. RTI helps in fetching the purchase value (on-road price) of the tractor in case of theft or total loss. When the cost of repair is over 75% of the IDV, it is considered a total loss. However, it is applicable if the tractor is extremely damaged and becomes unusable, but for small damages, this cover is not applicable.
- Electrical accessories – This coverage provides coverage for any loss or damage caused to the electrical accessories fitted to the tractor.
- Personal accident cover to the paid drivers – By opting for this cover, this commercial tractor insurance policy extends the personal accident cover to the drivers who are being paid to drive the insured tractor by the owner of the tractor.
- Liabilities to the employees – In case the employee of the insured person causes any damages or losses while driving the insured tractor, it will be covered by the insurer.
- Bi-fuel kit – This cover protects the bi-fuel kit installed in the tractor from any unforeseen losses or damages.
Claim process of Tractor Insurance
Tractor insurance is bought to get compensation for the loss or damages. For getting compensation, filing a claim properly is very important. One can avail of a cashless claim or reimbursement claim according to his/her convenience. Both procedures are discussed below:
- As soon as the incident happens, one needs to inform the insurer immediately.
- In order to file a claim, one has to fill in the claim form. One can download it from the website of the company or can collect it from the official branch.
- Then, submit the duly filled and signed claim form along with the required documents. It would be advisable to keep those documents in hand so that the claim process can be quicker.
- An inspector or surveyor will be sent on behalf of the company to inspect the condition of the tractor to assess the loss and damage. Cooperate with the surveyor and do not produce any wrong information.
- Once the inspector is satisfied, the company will begin the claim process from their end.
- Once you get permission to take the vehicle to the network garage for repair, if needed, you can take it to the concerned network garage of the company to avail of the cashless facility.
- The expenses for the damage and losses will be settled by the insurer directly with the network garage within the stipulated time period if the insurer is satisfied with your claim.
- Intimation to the insurance company is required.
- The insurer will make an arrangement to inspect the damaged insured tractor physically.
- The repair work estimated by the garage has to be submitted to the insurer.
- The insurance company will do a thorough check and if satisfied, will approve the repair work.
- The insurance tractor will go for the repair work. One can choose the garage according to his/her choice. Choosing a network garage is not mandatory for this type of claim.
- Once the repair is done, pay all the bills.
- Submit all the documents and bills including the duly filled and signed claim form to the insurer.
- The documents will be verified.
- If no discrepancy is found, the claim amount will be paid by the insurer deducting certain amounts.
- Duly filled and signed Claim Form
- Vehicle Registration Certificate and Driving license
- Fitness Certificate
- Load Challan
- Tax Slips
- Original Insurance Copy. (Print of soft copy is also valid)
- Aadhar Card
- Route Permit
- First Information Report Copy
- Photographs of the damaged tractor
- Original repair bill from the garage
- The original estimate of loss
- Keys of the tractor (In case of theft claim)
- Discharge voucher from the garage
Factors That Can Affect The Premium of Tractor Insurance
The following factors can influence the premium value of a tractor insurance policy.
Make, Model, Variant: The premium for insuring a tractor differs from one variant to another. This is because of the vehicle’s basic composition. That is why the vehicle’s manufacturer, its type, the cubic capacity of the engine, etc. will have a direct impact on the tractor insurance premium.
Age: The age of the vehicle takes into account two important concepts related to tractor insurance: Depreciation and Insured Declared Value (IDV). These two concepts are interrelated. Usually, an old tractor will have more depreciation and less IDV. This means it will cost less to insure an old vehicle and more to insure a new vehicle.
Location: Insuring a tractor in a metro is going to cost more than insuring one in a tier 3 city. This is because the tractor is perceived to be prone to damage in an urban setting.
Cover: A basic Third-party policy is mandatory by law in India. It offers cover against third-party liabilities. On the other hand, a comprehensive tractor insurance policy covers Own Damage along with third-party liabilities. Therefore, a comprehensive policy costs more than a third party one.
Add-ons: Add-ons offer extra security. And extra things usually come at a price. This applies to insurance as well. Including Add-ons will increase the premium amount. Thus, it is suggested to go for only those Add-ons that one feels are absolutely necessary.
No Claim Bonus (NCB): Insurance companies offer a discount on the premium (on tractor insurance renewal) if the insured person has not raised a claim during the previous policy period.
Anti-theft Device: Protecting the tractor with an anti-theft device that is certified by the Automotive Research Association of India (ARAI) might fetch you a discount on tractor insurance premiums.
Seller: If one purchases tractor insurance from an agent, the agent is bound to charge some commission for providing a service. It is best to purchase tractor insurance directly from the insurer without involving any middleman.
How To Purchase Tractor Insurance?
One can purchase a tractor insurance policy in the following ways:
- By visiting one of the official branches of the concerned insurance policy.
- By visiting the official website of the company, and opting for the online purchase facility of the insurer.
- By contacting one of the registered and licensed agents of the company.
- By getting connected to one of the registered insurance brokers.
Renewal Process of Tractor Insurance
Tractor insurance policy can be renewed both offline and online. If the insured person wants to go for offline renewal, visit the nearest branch of the concerned insurer or contact the agent of the insurance company.
If one is comfortable with the online policy renewal, just follow the below steps:
- Visit the official website of the insurance company
- Go to the policy renewal option
- Fill in the required details such as name, policy number, etc., and click on submit
- Make the payment
- After one has made the payment, the policy will be renewed and the document will be sent to the registered email ID and/or phone number.
- One can also download the document from the website and print it for better convenience.
Frequently Asked Questions
Many insurers extend the liability to a non-owned vehicle when rented for personal use. Some companies have some restrictions on this use. Even some tractor rental companies have some restrictions. It is better to contact the insurance company to know about the restrictions and conditions applied by the company.
Yes, insurance companies are liable for it. It is third party insurance for tractors.
Visit the website of the Insurance Information Bureau, which is framed by the Insurance Regulatory and Development Authority of India (IRDAI), and enter the registration number of your tractor to check the details of your tractor insurance cover.
One can pick from the following ones:
- Tata AIG
- United India Insurance Company
- ICICI Lombard
- Bajaj Allianz
- Oriental Insurance
- Cholamandalam insurance
- Royal Sundaram tractor insurance
No Claim Bonus is valid up to 90 days from the previous policy expiry date. If the policy is not renewed within 90 days, the No Claim Bonus will become 0% and no benefit shall be passed on to the renewed policy.
No, each tractor is required to have its respective insurance policy.
The insurance plans are normally issued for a period of one year. However, in rare cases, a tractor insurance extension for less than one year can be issued after approval from authorities.
Yes, but only in the case the tractor is available as a standard production model in India and has an Indian registration number.
Yes. If you have purchased a used tractor, you can transfer the insurance policy to your name by informing the insurance company within 14 days from the date of purchase of the vehicle.