BOCI writes to IRDAI for extension of vehicle insurance validity
Private passenger transport operators' body Bus & Car Operators Confederation of India (BOCI) has written to insurance regulator IRDAI, requesting extension of vehicle insurance validity.
BOCI operators run 17 lakh buses and account for 30 crore passenger trips. Its members also operate 1.1 million cars which are used for intercity travel.
"We urge Insurance Regulatory and Development Authority of India (IRDAI) and the government to extend vehicle insurance validity equal to number of lockdown days from the date of expiry without additional premium and no increase in annual premium for next one year," BOCI President Prasanna Patwardhan was quoted as saying in a release.
He said operators are under pressure from multiple sides -- fuel price hikes, reduced capacity due to social distancing norms, loan EMIs, taxes and insurance premiums, among others.
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"The ongoing financial burden with no revenue in the past quarter has pushed us on the brink of collapse," Patwardhan said.
In the current scenario, operators will not be able to pay premiums, leading to large number of defaults, as they have not been able to operate since lockdown began, he said.
Owners pay about ₹1 lakh per year towards insurance premium for a bus, and for premium buses it might go up to ₹2 lakh, he added.
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The vehicles have been grounded since lockdown, therefore third-party damage is ruled out. Since a major part of the premium amount is paid towards third-party damage, the insurance companies should increase validity equal to the number of lockdown days, BOCI said.
"The validity extension sought will bring much-needed relief to an already stressed sector," Patwardhan said.
Recently, the government had announced extension of validity date of motor vehicle documents up to September 30, 2020. These include documents such as validity of fitness, permit (all types), driving license, registration or any other concerned documents.
It was the second validity extension by the government due to lockdown.
"However, the government has not addressed the vehicle insurance validity for comprehensive and third-party policy covers," BOCI said.
