Commercial vehicle insurance premium equals third-party premium plus own damage premium, minus any No Claim Bonus or discount you're entitled to. The third-party (TP) premium is prescribed by the Central Government through the Ministry of Road Transport and Highways (MoRTH), in consultation with IRDAI, and is based on factors such as the vehicle category, gross vehicle weight (GVW) or seating capacity. These base rates are uniform across insurers. The OD portion depends on your vehicle's IDV, age, location and claims record and this is the part where shopping around actually saves money. As of mid-2026, the TP rates in
force are still the ones notified for FY 2024-25, since the widely discussed FY 2026-27 hike hasn't been gazetted yet.
A transport operator renewing six trucks in the same week can end up with six different quotes and no clear sense of which number is fixed by law and which one the insurer is free to negotiate. That confusion costs money. A comprehensive commercial vehicle policy generally combines two components: mandatory third-party cover and optional own damage (OD) cover. A third-party-only policy includes only the mandatory TP component. Our commercial vehicle insurance premium calculator splits the two out instantly, for trucks, taxis, tempos,
tractors, buses and three-wheelers, so you know exactly what's negotiable and what isn't before you call an agent.
What This Calculator Shows You
Enter your vehicle category (Goods Carrier, Passenger Carrier, Taxi-Cab, Tractor or Three-Wheeler), then either your GVW or seating capacity depending on the category, along with IDV, vehicle age, location and whether you've claimed in the last policy year. The calculator returns three numbers: the fixed TP premium for your slab, an estimated OD premium based on typical
insurer pricing and the total estimated annual premium. It's free,
takes under a minute and doesn't need a login.
One caveat worth flagging upfront. The TP figure you see is IRDAI's official rate and won't change insurer to insurer. The OD figure is an estimate, since actual own damage pricing depends on underwriting factors specific to your vehicle and insurer that only get confirmed once your proposal reaches the
insurer's desk. Treat the total as a strong starting point for budgeting, not a locked-in quote.
How Commercial Vehicle Insurance Premium Is Calculated
The formula insurers and brokers work with is straightforward once you see it written out:
Total Premium = Third-Party Premium + Own Damage Premium − (NCB + Other Discounts)
Third-party premium and own damage premium exist for entirely different reasons and that's why they're priced so differently.
Why TP and OD Are Priced Differently
TP cover pays for injury, death or property damage you cause to someone else and it's compulsory under the Motor Vehicles Act, 1988. Because every vehicle owner is legally required to buy it, IRDAI (working with the Ministry of Road Transport and Highways) fixes the base rate centrally. An insurer in Coimbatore and one in Kolkata both charge the same TP premium for the same 12-tonne goods carrier. There's no comparison shopping to be done here, only compliance.
OD cover, on the other hand, protects your own vehicle against accident damage, fire, theft and natural calamities and it's optional unless you're financing the vehicle. Since insurers carry the actual repair and replacement risk, they price OD based on your vehicle's IDV, its age, where it operates, what it's made of and how many claims you've filed.
Third-Party Premium by Vehicle Type and GVW Slab
These are the current IRDAI-notified base rates. They've stayed unchanged since the FY 2024-25 notification, because the sector's third-party rates have effectively been frozen at FY 2023-24 levels for the past couple of years while a broader revision remains under discussion. Rates exclude 18% GST.
Base premium rates prescribed under the latest applicable Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules notified by the Ministry of Road Transport and Highways (MoRTH), in consultation with IRDAI. Rates exclude GST.
| Vehicle Type |
GVW / Capacity |
Annual TP Premium (Base) |
| Goods carrier (other than 3-wheeler) |
Up to 7,500 kg |
Rs. 16,049 |
| Goods carrier (other than 3-wheeler) |
7,500–12,000 kg |
Rs. 27,186 |
| Goods carrier (other than 3-wheeler) |
12,000–20,000 kg |
Rs. 35,313 |
| Goods carrier (other than 3-wheeler) |
20,000–40,000 kg |
Rs. 43,950 |
| Goods carrier (other than 3-wheeler) |
Above 40,000 kg |
Rs. 44,242 |
| Goods-carrying three-wheeler |
Any GVW |
Rs. 4,492 |
| Passenger four-wheeler, up to 6 seats |
Up to 1,000 cc |
Rs. 6,040 |
| Passenger four-wheeler, up to 6 seats |
1,000–1,500 cc |
Rs. 7,940 |
| Passenger four-wheeler, up to 6 seats |
Above 1,500 cc |
Rs. 10,523 |
| Bus (other than educational institution) |
More than 6 passengers |
Rs. 14,343 |
| Educational institution bus |
More than 6 passengers |
Rs. 13,729 |
| Tractor (used solely for agriculture) |
N/A |
Nominal, own damage typically dominates the premium |
Note: Last verified against the latest applicable Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules issued by MoRTH and related IRDAI circulars. Rates exclude 18% GST. Eligible electric commercial vehicles receive the applicable concession on third-party premium as notified by the Central Government. Verify the applicable discount at the time of policy purchase. Your final invoice adds 18% GST and, for goods carriers, may include a small loading if the vehicle also carries a trailer. Confirm the exact figure at underwriting, since MoRTH occasionally issues minor corrections between draft and final notification.
Notice how steeply the goods carrier slab climbs. A 15-tonne truck pays more than double what a pickup under 7,500 kg pays, purely because heavier vehicles cause costlier third-party accidents on average. Passenger carriers work on a similar logic but scale with seating capacity and engine size instead of weight.
Ready to see where your vehicle lands? Get your free commercial vehicle insurance estimate on SMC Insurance and compare quotes from over a dozen insurers in one place, without calling a single agent.
Is the 2026 Third-Party Premium Hike in Effect?
Not yet and this is the single most searched question around
commercial vehicle TP pricing right now, so it's worth being precise about where things stand.
What's Proposed?
MoRTH and IRDAI have been discussing a third-party premium hike since mid-2025, with figures ranging from a flat 10% to as much as 25% for the worst-affected segments. Commercial vehicles keep coming up as one of the categories likely to see a sharper increase than private cars, since goods and passenger carriers have historically run heavier claim losses relative to the premium collected. Industry commentary through the first half of 2026 pointed to an April 2026 rollout
window, but that date has come and gone without a formal gazette notification.
Which Segments Are Most Affected?
If the hike does land the way it's being discussed, heavy goods carriers above 12,000 kg and buses are the segments transport operators should watch most closely, since these have carried the largest claim burden during the freeze. Categories seen as lower risk, like educational institution buses, may get a smaller bump or none at all, echoing how past revisions
have protected that segment.
What Does This Mean for Your Renewal?
Nothing changes for your renewal today. The rates in the table above are still the ones that apply. If your policy is due in the next few months, there's no penalty for renewing now at the current rate and no guarantee the new rates (whenever notified) will be lower. We'll update this calculator and this table the day IRDAI issues the final notification, so bookmark this page
rather than relying on a screenshot.
What Affects Your Own Damage (OD) Premium
This is the half of the bill you can actually influence and it's worth understanding each lever before you accept the first quote you're shown.
IDV and Vehicle Age
Insured Declared Value is the maximum payout you'd get if your vehicle is stolen or damaged beyond repair and it's essentially your vehicle's current market value. A higher IDV means a higher OD premium, since the insurer is on the hook for more. IDV drops every year as your vehicle ages, on a fixed depreciation schedule, which is why OD premiums generally fall as a truck or bus gets older, even as the TP portion stays flat.
Make, Model and Repair Cost
Two trucks with the same GVW slab can carry very different OD premiums if one has cheaper, locally available spare parts and the other needs imported components. Insurers price OD partly on how expensive it typically is to fix your specific make and model after a claim.
Usage Type and Location
A tempo running intercity highway routes carries different risk than one confined to city delivery runs and insurers factor that in. Location matters too. A vehicle registered and operating in a high-traffic, accident-prone RTO zone typically sees a higher OD quote than the same vehicle in a quieter district.
No Claim Bonus and Add-ons
NCB rewards claim-free years with a discount on the OD premium and it only applies to comprehensive or standalone OD policies, never to a TP-only policy. A single claim resets your NCB to zero.
| Consecutive Claim-Free Years |
NCB Discount on OD Premium |
| 1 year | 20% |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5+ years | 50% |
For fleet owners running several vehicles, it's often cheaper to pay a small repair out of pocket than to file a claim and lose an accumulated 40-50% discount on that vehicle's renewal.
Third-Party vs Comprehensive: Which Should You Choose?
- When Third-Party-Only Makes Sense
If your vehicle is old, fully depreciated, or genuinely dispensable to your operation, a TP-only policy meets your legal obligation at the lowest possible cost. It's also the only option once a vehicle's IDV drops so low that comprehensive cover barely adds value beyond what TP already provides.
- When Comprehensive Is Worth It for Fleet Vehicles
For a financed vehicle, a newer truck, or any vehicle where a single accident or theft would meaningfully hurt your business, comprehensive cover is the more defensible choice, even at a higher premium. Fleet operators in particular tend to underestimate how often a single OD claim, covered fully, saves far more than years of TP-only premiums saved. If you're weighing this trade-off for your own fleet, our detailed comparison of third-party and comprehensive insurance walks through the numbers for different vehicle ages.
For Fleet Owners: A Few Things Worth Knowing
Renewing multiple vehicles together doesn't automatically get you a bulk discount from every insurer, but staggering renewals to a single month makes it far easier to track NCB across your fleet and avoid missing a renewal date, which is when you lose accumulated NCB entirely.
If you're running a mixed fleet of goods and passenger vehicles, our dedicated guide to goods carrying vehicle insurance breaks down category-specific requirements you won't find bundled into a general calculator.
What the Calculator Can't See
No online calculator can price everything. Permit type and route restrictions can carry their own loadings that only show up once your RTO and route details are verified. Some RTOs run materially different claim histories than the state average, which insurers price into OD even though the calculator uses a broader regional estimate. And insurers retain underwriting discretion on OD pricing, meaning the final number can move once they inspect the vehicle or review your claims history in detail. Use the calculator to budget and compare, then confirm the exact figure with the insurer before you pay.
Summing Up!
Your commercial vehicle premium isn't one mysterious number, it's two very different components stapled together. The TP portion is fixed by IRDAI, identical across every insurer and currently sitting at FY 2024-25 rates while a broader hike remains stuck in discussion. The OD portion is where your IDV, vehicle age, location and claims record actually move the needle and it's the part worth comparing across insurers before you renew. Run your vehicle through the calculator above to see both numbers broken out, check where your GVW slab lands on the table and decide whether comprehensive cover is worth the extra premium for your specific vehicle. If a claim-free record has built up a meaningful NCB, protect it before you file anything small.
Disclaimer:The information provided on this platform is intended for general awareness and educational purposes. While every effort is made to ensure accuracy, some details may change with policy updates, regulatory revisions, or insurer-specific modifications. Readers should verify current terms and conditions directly with relevant insurers or through professional consultation before making any decision.
All views and analyses presented are based on publicly available data, internal research, and other sources considered reliable at the time of writing. These do not constitute professional advice, recommendations, or guarantees of any product’s performance. Readers are encouraged to assess the information independently and seek qualified guidance suited to their individual requirements. Customers are advised to review official sales brochures, policy documents, and disclosures before proceeding with any purchase or commitment.
Commercial Vehicle Insurance FAQs
How is commercial vehicle insurance premium calculated?
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It's the sum of your IRDAI-fixed third-party premium and your insurer-priced own damage premium, minus any No Claim Bonus or discount you qualify for. TP depends on your vehicle's GVW slab or seating capacity. OD depends on IDV, age, location and claims history.
Has the 2026 third-party premium hike been officially notified?
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No, not as of mid-2026. MoRTH and IRDAI have discussed a 10-25% hike since 2025, with commercial vehicles among the segments likely to see a sharper increase, but no gazette notification has been issued. Current renewals still use FY 2024-25 rates.
Is third-party insurance mandatory for commercial vehicles?
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Yes, every commercial vehicle on Indian roads needs at least a valid third-party policy under the Motor Vehicles Act, 1988. Driving without one attracts fines and possible impoundment.
Does No Claim Bonus apply to commercial vehicle insurance?
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Yes, but only to the own damage portion of a comprehensive or standalone OD policy. It doesn't apply to third-party-only cover and it resets to zero the moment you file a claim.
Are tractors and three-wheelers priced differently from trucks?
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Yes, tractors used purely for agriculture carry a nominal TP rate with the own damage premium typically dominating the total. Three-wheelers, whether goods or passenger carrying, sit on their own separate, lower TP slab regardless of GVW.
How does IDV affect my commercial vehicle premium?
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A higher IDV increases your own damage premium, since it raises the insurer's maximum payout liability. It has no effect on your TP premium, which is fixed regardless of your vehicle's declared value.
Can I insure a fleet of commercial vehicles under one policy?
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Most insurers issue separate policies per vehicle even within a fleet, though some offer fleet-specific packages with simplified renewal management. Check with your insurer or broker on what's available for your fleet size.
Does location or RTO affect commercial vehicle premium?
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It affects the own damage portion. Vehicles registered or operating in accident-prone or high-claim RTO zones typically see a higher OD quote, even though the third-party premium stays fixed nationwide for the same category and slab.
Disclaimer: The information provided on this page is intended for general awareness and educational purposes. While every effort is made to ensure accuracy, some details may change with policy updates, regulatory revisions, or insurer-specific modifications. Readers should verify current terms directly with relevant insurers or through professional consultation before making any decision.
