Insurance Board hikes accident cover for passengers to Rs 500,000The Insurance Board (IB) has hiked the insurance coverage amount by five times in the case of death of passengers in vehicle accidents, effective from the beginning of the next fiscal year.
The Insurance Board (IB) has hiked the insurance coverage amount by five times in the case of death of passengers in vehicle accidents, effective from the beginning of the next fiscal year.
Issuing the amended Directive on Motor Insurance Rate, the insurance sector regulator has increased the coverage to Rs500,000 per person from existing Rs100,000. Currently, third party (those not in the vehicles) get a coverage of Rs500,000.
The board said the provision is applicable to passengers in all types of public and private vehicles—four-wheelers, three-wheelers and two-wheelers.
IB Director Shree Man Karki said the new provision is in line with the budget announcement. “Under the vehicle insurance, a similar provision of third party insurance will be made to insure the passengers travelling in public vehicles,” states the budget for 2016-17.
The board has doubled the compensation for performing last ritual of an accident victim to Rs50,000. Earlier the compensation amount was Rs25,000. It has also raised the medical insurance of the injured to Rs300,000 per person from Rs5,000. A caretaker of the wounded will receive Rs500 daily for 45 days from previous 30 days.
The new provision has maintained the third-party insurance at Rs500,000, while the insurance coverage ceiling for medical treatment has been raised to Rs300,000 from Rs200,000. All types of vehicles, including ambulance, used to transport the wounded to the hospital will be provided Rs10,000.
Karki said they have also introduced the “knock for knock” system. “If two vehicles collide, insurers will have to bear the cost for maintaining the vehicles concerned,” states the directive.
In case of passengers’ death in such collision, compensation of crew member and riders will be drawn from the insurance coverage of the vehicles concerned. “The insurer will have to be reimbursed the amount from the insurer of the other vehicle which is found guilty for the accident.”
Third-party vehicle facing loss due an accident will be provided the repairing cost without depreciation provision.
The IB has not made any insurance coverage provision for a third person in a two-wheeler. “Only the driver and a pillion rider of a motorbike will be provided the insurance coverage of Rs500,000,” read the directive.
Karki, however, said a child of less than one year of age would receive 25 percent of the insurance policy amount, while a child of 1-5 years of age would be provided 50 percent of the policy amount.
If the treatment of an injured person is done in foreign countries, including India, the family members concerned will have to inform the insurer in a week.
“The provision has been enforced to discourage the practice of producing fake bills to receive hefty sum for treatment coverage,” Karki said.