School Bus Insurance in India – Coverage & Costs
Every day, 25 million children in India travel by school buses. Shockingly, 1 in 5 school buses lacks adequate insurance, exposing operators to massive financial risks. Whether you run a single bus or a large fleet, school bus insurance isn’t just a legal requirement—it’s a critical safety net for students, staff, and your business.
In this guide, you’ll discover:
– Legal requirements for school bus insurance in India
– Types of coverage (third-party vs. comprehensive)
– Premium calculation factors
– Claim process for accidents
– Pro tips to reduce costs without compromising safety
Is School Bus Insurance Mandatory in India?
Legal Requirements Under Motor Vehicles Act
- Section 146 mandates third-party insurance for all commercial vehicles, including school buses.
- Penalties for non-compliance: ₹2,000 fine + possible imprisonment.
- Additional rules: State transport departments may require higher liability limits.
Who Needs It?
- School-owned buses
- Contracted private transporters
- Self-employed bus operators
Pro Tip: Always carry insurance documents during RTO inspections to avoid fines.
Types of School Bus Insurance Policies
1. Third-Party Insurance (Basic Cover)
- Covers: Injuries/deaths of third parties (pedestrians, other vehicles)
- Excludes: Damage to your bus or passengers
- Premium: Fixed by IRDAI (₹7,000–₹15,000/year for buses)
2. Comprehensive Insurance (Recommended)
- Covers:
- Third-party liabilities
- Own damage (accidents, fires, natural disasters)
- Theft
- Passenger liability (up to ₹10 lakh per student)
- Premium: 2–3% of bus’s IDV (Insured Declared Value)
Policy Comparison
| Feature | Third-Party | Comprehensive |
|---|---|---|
| Third-Party Coverage | ✅ Yes | ✅ Yes |
| Own Damage | ❌ No | ✅ Yes |
| Theft Protection | ❌ No | ✅ Yes |
| Passenger Liability | ❌ No | ✅ Yes (Add-on) |
| Premium Cost | Lower | Higher |
5 Factors That Affect Your Premium
- Bus Age & Model
- New buses cost more to insure (higher IDV)
- Seating Capacity
- 25-seater vs. 50-seater: Premiums vary by 30–50%
- Location
- Metro cities (Delhi, Mumbai) have 15–20% higher premiums
- Safety Features
- GPS, fire extinguishers, and seat belts may qualify for discounts
- Claim History
- Accident-free operators get No Claim Bonus (NCB) up to 50%
School Bus Insurance Claim Process
Step-by-Step Guide for Accidents
- Immediate Actions
- Ensure student safety and call medical help if needed
- Inform police (FIR required for injuries)
- Notify Insurer
- Call insurer’s 24/7 helpline within 24 hours
- Document Evidence
- Click photos of damage, accident site, and injuries
- Surveyor Inspection
- Don’t repair the bus before approval
- Claim Settlement
- Cashless: At network garages
- Reimbursement: Pay first, submit bills later
Pro Tip: Maintain an accident logbook with driver statements and witness details.
3 Common Mistakes to Avoid
- Underinsuring Passengers
- Ensure liability covers all students (₹1–10 lakh per child)
- Ignoring Add-Ons
- Zero depreciation and engine protect are crucial for buses
- Late Renewals
- A lapsed policy voids NCB and risks penalties
5 Ways to Reduce Premiums
- Increase Deductibles
- Opt for voluntary excess to lower costs
- Install Safety Devices
- GPS trackers and CCTV may qualify for discounts
- Group Policies
- Insure multiple buses under one policy
- Pay Annually
- Avoid monthly installment fees
- Compare Quotes
- Use platforms like Policybazaar to find the best rates
FAQs About School Bus Insurance
Q1. Is passenger liability coverage mandatory?
A: While not legally required, most schools demand ₹5–10 lakh/student coverage.
Q2. Can I transfer insurance when selling a bus?
A: Yes, but the new owner must inform the insurer within 14 days.
Q3. What’s excluded from coverage?
A: Wear-and-tear, mechanical breakdowns, and driver negligence.
Q4. How to insure a 15-year-old bus?
A: Insurers may offer limited comprehensive coverage or only third-party.
Q5. Are school staff covered under insurance?
A: Only if you add employee liability as an add-on.
Final Checklist for Bus Operators
– Purchase at least third-party insurance (legal minimum)
– Opt for comprehensive + passenger liability (recommended)
– Train drivers on accident reporting procedures
– Renew policy before expiry to maintain NCB
– Compare 3+ quotes annually for the best rates
