Third party car insurance

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Third party car insurance: new provision ‘six months’
The new proposal calls for several times the compensation to be increased. In this case, the maximum amount of compensation is about 25 times the existing amount or 5 lakh IDRA is thinking. Although insurance companies want to reduce it a bit. It can be 3 to 4 lakh.

The companies are trying to reduce the amount of car owners’ premiums and insurance claims by bringing back third party insurance.

Although there is no objection to raising the premium by two to four times, the insurance companies are opposing the plan to increase the compensation to Rs 5 lakh.

They say that huge number of people are killed in road accidents every year. It is not possible to fix the premium rate at the rate at which they are going to be compensated.

 

The fact that five to six thousand people are killed and more injured in road accidents every year, the financial condition of the affected families has deteriorated drastically. In this case, insurance could be a financial safeguard.

These people could be covered by the third party insurance facility of the car owner. But that advantage was nominal in the country. As the premium was minimal, the amount of insurance claim was so insignificant that the victims would not even claim it.

That insurance system has also been canceled due to ineffectiveness. However, the initiative that has been taken to bring it back in a timely manner can provide financial security to the families affected by road accidents.

This time the government wants to make it more effective with more premium, more compensation and strict legal framework than before. Meanwhile, the Insurance Development and Regulatory Authority (IDRA) has also laid out the preliminary outline of the new third party insurance.

The old motor vehicle law of 1983 made it compulsory to insure the risk of a third party and there were penal provisions under it. However, it was repealed in the new Road Transport Act of 2016, which came into force in November 2019.

Last December, the IDRA issued a notification canceling the insurance provision. However, in less than a year, the company is returning to motor vehicle insurance.

The IDRA says there was a lack of coordination between the new road transport law and the insurance law. To eliminate this, third party risk insurance is canceled. Now, realizing the importance, steps have been taken to return it more effectively. The amount of compensation is increasing more than before, the rate of premium is also increasing.

What is third party insurance?

This is an insurance policy to provide financial benefits to the accident victims. The first party here owns the car. He will pay a fixed premium per year to an insurance company.

The insurance company is the second party who will pay compensation in case of car accident as opposed to taking premium. And the person who will be the victim of the motor vehicle accident, he is the third party, will get insurance compensation.

Why not effective

Earlier, the annual premium for third party risk insurance for motor vehicles was very low. Even if a person was killed in the accident, the maximum amount of compensation was 20 thousand rupees. Apart from that, there were many sufferings to get insurance money.

Due to the low premium, car owners did not pay much attention to it. Apart from that, the victims would not claim insurance as the compensation was less.

IDRA Executive Director SA Shakil Akhtar told NewsBangla that there was a reason for not making a claim. The 1973 law had a clause. The sectors that were supposed to be compensated for this are not working now.

‘For example: if a person dies in an accident, his maximum compensation is Rs 20,000. Is it any money now? A man died in a car accident, and will be compensated 20,000 rupees. Does it fit in 2021? If someone dies, who will claim 20 thousand rupees compensation? It will cost 22,000 rupees to get 20,000 rupees. ‘

How much premium in new proposal, how compensation can be

In the case of old motor vehicle insurance, the premium for motorcycles is 300 rupees per year, but it is being considered to increase it to 500 rupees or more.

In the case of cars, it is said to be about 4 times. The previous premium was around Rs 500, which is being increased to Rs 2,000.

The new proposal calls for several times the compensation to be increased. In this case, the maximum amount of compensation is about 25 times the existing amount or 5 lakh IDRA is thinking. Although insurance companies want to reduce it a bit. It can be 3 to 4 lakh.

However, four more levels (slab) of compensation are also being discussed, depending on how seriously the person was seriously injured in the accident, including the maximum compensation for death.

For example, in case of severe damage, Rs. 3 to 3.5 lakhs, if the loss is a little less than Rs. 2 to 2.5 lakhs, if it is less than Rs. .

How far is the new initiative

IDRA member to fix the risk of accident insurance again. A committee headed by Dalil Uddin was formed. Later, another sub-committee headed by IDRA Executive Director SA Shakil Akhtar was formed. The committee was tasked with drafting a new proposal.

The committee has already met several times with the insurance parties. They have also made a preliminary proposal on how the compensation will be, how much the premium will be, how many types of compensation will be.

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