All You Need to Know About Tractor Insurance in India
India is an agriculture-oriented country where more than 70% of its land is under agriculture. Agriculture, therefore, is the primary source of livelihood for most of the population of India. Tractors are an important component of the agriculture process as they help farmers in the cultivation and harvesting process. That is why tractors are very popular and in-demand among farmers and land-owners who use their lands for cultivation purposes. If the tractor faces damage, the farmers face a considerable financial loss. This is why tractor insurance policies become necessary.
Besides the need to cover financial loss, since tractors are a type of vehicle, they need a valid insurance policy on them due to the provisions of the Motor Vehicles Act. Tractor insurance policies are, therefore, compulsory for tractors. Tractor insurance policies are sold by many insurance companies. These policies fall under the commercial motor insurance policies and they offer coverage for farm or commercial tractors.
What is tractor insurance?
A tractor insurance policy is a commercial motor insurance policy which covers tractors against damages suffered. There is also a third party liability coverage wherein damages caused by tractors are also compensated by the policy.
Top 3 Features of tractor insurance policies
Tractor insurance plans have the following salient features –
- Usually, a comprehensive tractor insurance policy is offered by insurance companies as a commercial motor insurance policy
- The sum insured of the policy is calculated as the market value of the tractor after deducting appropriate depreciation based on the tractor’s age. The sum insured is called Insured Declared Value (IDV)
- The policy is issued for a period of one year
Who can buy tractor insurance?
Tractor insurance policies can be bought by legal owners of a tractor who want to secure the financial losses faced when their tractors are damaged and also fulfil the provisions of the Motor Vehicles Act.
What is covered under tractor insurance plans?
Tractor insurance plans, under commercial motor insurance policy section cover the following instances of damages –
- Damages suffered by the tractor due to natural disasters like earthquakes, lightning, road slides or landslides, floods, storms, cyclones, etc.
- Damages suffered by the tractor due to man-made causes like fire, burglary, theft, strikes, riots, etc.
- Third-party liability faced when the tractor physically hurts another individual or when the tractor damages another individual’s property
- Personal accident cover for the owner/driver of the tractor which pays a lump sum benefit in case of accidental death and disablement
Add-ons under tractor insurance plans:
Under some tractor insurance plans, you can also find add-ons or optional coverage features. These add-ons are available at an additional premium. Common add-ons which you can choose include the following –
- Personal accident cover for a paid driver
- Cover for electrical accessories of the tractor
- Legal liability towards paid drivers and employees
- Coverage for bi-fuel kit
- Return to the invoice where the invoice value of the tractor is paid in case of theft or total loss
- Protection of the no claim bonus in case of a claim
What is not covered under tractor insurance plans?
The following instances are commonly excluded from the scope of coverage of most commercial motor insurance policy, especially tractor insurance policies:
- Depreciation and normal wear and tear of the tractor and its parts due to usage
- Any type of electrical or mechanical breakdowns
- Violating the limitations of using the tractor and suffering damage due to such violations
- Damages suffered when the tractor is being driven without a valid driving license
- Damages suffered when the tractor was driven under the influence of alcohol or drugs or if it was driven outside India
- Consequential losses suffered after a damage
- Losses incurred due to war, rebellion, mutiny and similar perils
How are premiums for commercial motor insurance policy, i.e. tractor insurance plans calculated?
Premiums of a tractor insurance policy are calculated depending on the following factors –
- IDV of the policy
- Make, model and variant of the tractor
- Fuel type
- Modifications are done
- Age of the tractor
- Place of registration
- No claim discount in case no claims have been made and the policy is being renewed
How to make a claim under a tractor insurance policy?
To make a claim under your tractor insurance policy, the following steps should be followed –
- You should inform the insurance company immediately after a claim occurs
- In case of own damage claims, the insurance company usually arranges for an on-the-spot survey of the damages by sending a surveyor. You should not move your vehicle before the survey has been done
- Alternatively, the insurer can ask you to take your vehicle to the nearest networked garage where the survey would be done
- After the survey has been done the insurer would approve your claim and you can get cashless repairs done
- In the case of third party claims, you have to inform the insurance company and also file a police FIR. The claim would then go to the motor accidents tribunal which would specify the financial liability. The liability would, then, be paid by the insurance company
- If the tractor is stolen, you should file a police FIR and inform the insurance company. If the police are not able to trace your tractor, the insurance company would pay the IDV and settled your tractor insurance claim
Documents required for commercial motor insurance policy, i.e. tractor insurance claims:
To make a valid claim under your tractor insurance policy, the following documents need to be submitted:
- The claim form which should be filled in and signed by the policyholder
- RC book of the tractor
- Driving license
- FIR copy (in case of a third party or theft claims)
- Repairs bills in original
- Photographs of the damaged tractor
- Subrogation letter
- Discharge voucher issued by the garage, etc.
Claim settlement under commercial motor insurance policy, i.e. tractor insurance plans
Tractor insurance claims would be settled on a cashless basis if the tractor is repaired at a garage which is tied-up with the insurance company. However, if the repairs are done at a non-networked garage, then you would have to bear the repair expenses initially. Thereafter, when you submit the original bills and claim form, the costs would be reimbursed by the insurance company within 7-10 days of submission of your claim.
How to buy tractor insurance?
To buy commercial vehicle insurance for your tractor, you can approach any insurance company offering the policy. You can buy the policy through the branch office of the company by submitting all the documents of your tractor like the RC book, PUC certificate, invoice, etc. and your KYC documents. The plan can, alternatively, be bought online from the website of the insurance company. To buy online you would have to fill up the application form and pay the premiums online. Once the premiums are paid, the policy would be issued.
Currently, some of the companies which offer tractor insurance in India include the following –
- IFFCO Tokio
- HDFC Ergo
- SBI General Insurance
- Magma HDI
Renewing tractor insurance policies
Renewing your tractor insurance policy is quite easy. You can get the policy renewed from the same company by paying the renewal premium. You can also switch insurers and opt for another policy for your tractor. When renewing, you should utilise any no claim bonus that you have under your policy. No claim bonus is a premium discount which the insurance company allows if you have not made any claims under your policy. The discount is allowed after each claim-free year and if there are consecutive claim-free years, the discount also multiplies. This discount lets you avail a discount on the renewal premium and make it more affordable.
So, a tractor insurance policy is a popular commercial insurance policy for tractor-owners which covers the damages caused as well as faced by the tractor. The policy pays the financial loss suffered by the owners of a tractor and gives them financial security. So, if you have a tractor which you use for commercial purposes insure it and protect yourself from possible financial losses in case of a contingency.
Frequently Asked Questions:
- How do I find out the name of the networked garage for cashless repairs?
The details of the networked garages in your area can be checked online on the insurance company’s website. You can also call up the claim helpline number of the insurance company and find out the closest networked garage for cashless repairs.
- Can my tractor insurance claim be rejected?
Yes, your tractor insurance claim can be rejected by the insurance company. Rejection of claims usually occurs when your policy has lapsed, when you claim for an excluded cover or when the claim process is not properly followed.
- Is renewing tractor insurance compulsory?
As per the Motor Vehicles Act, you need a valid insurance cover on your tractor. So, buying and renewing a tractor insurance policy is necessary to comply with the traffic laws.
- If an individual is killed by the tractor, would the insurance company pay a claim?
Yes, death of a third party is covered under third party liability coverage which is available under tractor insurance plans. Thus, in case of death of an individual, the insurance company would pay the claim as directed by the motor accidents tribunal.
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Courtesy Article: Supramind / October 25, 2019 mintpro.in