Guide to Choosing the Best Tractor Insurance: Types, Coverage and Claim Process

Table of Contents

• What is Tractor Insurance?
• What is the Need for Tractor Insurance?
• What are the Different Types of Tractor Insurance?
• What does Tractor Insurance Cover?
• How to Claim Tractor Insurance?
  • Documents Needed for the Tractor Insurance Claim Process
• How to Choose the Best Insurance for Your Tractor?
• What are the Factors that Affect Tractor Insurance Premium?

What is Tractor Insurance?

Tractor insurance is a policy to protect your tractor by offering coverage for its damage/loss because of unforeseen circumstances, such as natural disasters, accidental damage, or theft. This vehicle insurance policy outlines a legal agreement under which the insurer has to cover any damage to your tractor as well as the driver and passengers. It secures farmers against financial distress resulting from situations that are beyond their control.

Farming involves usage of tractors in difficult farming conditions which can lead to lot of damage to tractors and possibility of injury risks to farmers as well. Thus, tractor insurance provides a safety net to cover huge expenses that might be difficult for them to source on their own.

What is the Need for Tractor Insurance?

First, let us start with the obvious. The Motor Vehicle Act makes it mandatory for owners to have valid insurance coverage to run legally on Indian roads. A tractor third-party insurance is the bare minimum requirement. Without tractor insurance, you can be punished under the law.

A tractor insurance policy is also compulsory for farmers wanting a tractor to refinance a loan. If your tractor insurance policy has expired, you cannot get a loan against the tractor. You will have to renew the policy before applying.

Tractor insurance penetration is very low in India. Indian Council of Agricultural Research (ICAR) has found that farm machines are behind almost 1/3^rd of the total farm accidents. Even then, just 30% of farmers had a tractor insurance cover in 2015. In comparison, the global standard is set at 85%. Farmers are unaware of the importance of tractor insurance and the wide variety of benefits it offers.

What are the Different Types of Tractor Insurance?

Farmers can choose between two main types of tractor insurance in India, namely, comprehensive and third-party insurance. Note that only third-party insurance is required by law, while one can choose to opt for a comprehensive cover.

• Comprehensive Insurance: As the name suggests, this tractor insurance policy ensures comprehensive coverage to both the tractor and third parties. It means your tractor is protected against events like accidents, fire, theft, etc, while third-party liability is covered in case of third-party property damage, bodily injury and death. Also, one can get a coverage extension with add-on covers like engine protection cover and personal accident cover by paying an extra premium amount.
• Third-Party Insurance: Only third-party liabilities are covered by this tractor insurance policy. It provides compensation for bodily harm and vehicle and property damage done to third parties by the insured tractor. No cover is offered for damage to the tractor. Also, third-party insurance does not offer coverage for fire, theft and natural disasters. This is why it is generally cheaper than comprehensive insurance.

What does Tractor Insurance Cover?

Here is the scope of coverage that shows what is covered and excluded by the tractor insurance policy:

How to Claim Tractor Insurance?

File the tractor insurance claim as soon as possible in the event of damage, theft or accident to the tractor.

• Contact the insurance company to inform them about the loss or damage.
• Provide key details like the insured name, contact information and insurance policy number.
• Submit required documents, such as the claim form, proof of damages and policy document.
•  After examining the damages and legal aspects, the insurance company will determine the possibility of a claim.
• Upon approval, the claim amount will be credited to your account.

Documents Needed for the Tractor Insurance Claim Process

• Duly filled and signed claim form
• Copy of FIR
• Original replacement/repair bills
• Copy of Registration Certificate (RC)
• Copy of Driving License
• Subrogating letter
• Photographs of damaged tractor
• Discharge voucher from the workshop

After collecting and assessing documents from the policyholder, the claim is validated and then processed in the beneficiary's name. The time taken to settle claims depends on several factors, such as the extent of the damage or loss, policy type, and terms. Usually, it is completed within 7 working days after the insurance company receives all the relevant documents.

How to Choose the Best Insurance for Your Tractor?

• The first step is to evaluate what kind of coverage you want based on the potential risks, location and use of your tractor. You should keep in mind factors like theft protection, liability coverage and add-ons.
• Check out popular tractor insurance companies and compare their claim settlement history and customer reviews.
• Ensure you select a policy that offers the correct coverage type and required protection against any mishappening.
• Get quotes for the premium and deductibles from the insurer and check if you can afford it easily. Also, consider the list of network garages to ensure convenience during repair services.
• For comprehensive insurance, it is recommended to visit the dealership, as buying a policy, filing a claim, and settling it are hassle-free.

You can also look for third-party insurance online as it is more economical for users. There are many insurance companies in India that offer tractor insurance through a digital platform. The popular ones are SBI General, IFFCO Tokio and HDFC ERGO. In addition, you can also get help from third-party solutions on the Internet to choose the best tractor insurance for you.

What are the Factors that Affect Tractor Insurance Premium?

A variety of factors influence the premium for tractor insurance. You need to consider all these factors to ensure you make the right decision when choosing a tractor insurance policy. Check out the primary factors that impact tractor insurance premiums below:

• Coverage Type: Tractor insurance premium is based on the selected coverage level. As mentioned before, comprehensive insurance has higher premiums as it offers broader coverage than third-party insurance. In addition, opting for riders or add-ons will further increase the premium.
• Insured Declared Value (IDV): IDV gives an idea about the present market value of the tractor. If IDV is high, the premium will also be high, as the insurance company will have to pay more in the case of damage.
• Make & Model: Top models attract higher premiums because of their high IDV. A higher HP tractor is more expensive to insure than a lower one. Also, an old model has more depreciation and a low market value, and thus, its premium is also low.
• No Claim Bonus (NCB): If you have not raised a claim before, you are likely to get a discount on the premium. On the other hand, a higher premium is levied on users with a history of frequent claims.
• Deductible: A deductible represents the sum of money you agree to pay before the insurer covers the remaining liability. You can lower the premium with a high deductible, but you will need to pay more in the event of a claim.
• Security features: If the tractor is equipped with safety features like a GPS tracking system, it can have a lower premium as the chances of theft are reduced significantly.

A tractor plays an important role in enabling a wide range of farming tasks. Thus, its protection is crucial for farmers to ensure uninterrupted farm operations. Also, the safety of the driver and other property is paramount. A tractor insurance policy offers financial coverage against different types of risks that a farmer may encounter while operating the tractor. Choose a policy that provides suitable coverage and shields you from high expenses. Also, explore Tractorkarvan to buy a new tractor or implement to enhance your farm productivity.