Bus & Car Operators Confederation of India (BOCI), the apex body for public transport in India representing private passenger transport operators, has approached the regulatory insurance body, Insurance Regulatory and Development Authority of India (IRDA), seeking extension of vehicle insurance validity. BOCI operators run 17 lakh buses in various segments and accounts for 30 crore passenger trips, amounting to over 80% of all public transport in the country.
The private operators who are members of various associations & federations affiliated to BOCI are seeking IRDA and government intervention for extension of vehicle insurance validity. The public transport sector has been one of the worst hit with the lockdown due to COVID-19 pandemic and is reeling under heavy financial losses. BOCI has reached out to various state governments and has also made representations to the Ministry of Road Transport and Ministry of Finance to draw their attention on the plight of the public transport sector.
Operators cite that 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. Recently, the Government of India has 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. This is the second time the government has extended this validity due to lockdown. However, the government has not addressed the vehicle insurance validity for comprehensive and third-party policy covers.
Prasanna Patwardhan, BOCI President, said: “The public transport operators are on the verge of bankruptcy in the current situation. We are under pressure from multiple sides, fuel price hikes, reduced capacity due to social distancing norms, loan EMIs, taxes and insurance premiums and much more. The ongoing financial burden with no revenue in the past quarter has pushed us on the brink of collapse. We urge the Insurance Regulatory and Development Authority of India (IRDA) and the Government of India to extend vehicle insurance validity equal to the number of lockdown days from the date of expiry without additional premium and no increase in annual premium for next one year. The validity extension sought, will bring much-needed relief to an already stressed sector.”
“In the current scenario, operators will not be able to pay premiums leading to a large number of defaults as they have not been able to operate since lockdown began. We have written to the IRDA requesting an extension of insurance coverage for all transport vehicles. Members of the BOCI operate nearly 1.5 million buses and 1.1 million cars, which are used for intercity travel, as school buses, and as tourist vehicles. Owners must pay about Rs. 1 lakh a year towards insurance premium for a bus. This might go up to Rs. 2 lakh for premium buses,” he further added.
The public transport sector has suffered huge financial losses and continues to bleed. In India where a majority of the populace depends on public transport for their commute, survival of the sector is imperative. The operators collapsing and shutting down operations will have a serious ripple effect on public life and livelihood of millions of families who depend on the sector for their survival.