Insurance premium for govt vehicles halved

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KATHMANDU, JAN 31 -

The Insurance Board has halved the premium for third-party insurance (a victim of an automobile accident) for government-owned vehicles compared to private vehicles citing lower risk.

There are currently an estimated 100,000 government vehicles including around 10,000 motorcycles, according to the Department of Transport Management. The figure includes vehicles under various government offices including corporations.

The slash in the premium will reduce the government’s expenditure on third-party insurance significantly. It could not be immediately confirmed how much the government spends on third-party insurance. The total collection of premiums for third-party insurance amounted to Rs 1.75 billion in the last fiscal year, according to the board. Rastriya Beema Sansthan provides insurance coverage for most government-owned vehicles.

Earlier, the premium for government offices was 25 percent lower than for the general public. The premium for motorcycles of up to 150 cc is Rs 1,000. For cars, the premium ranges from Rs 3,000 to Rs 6,000. Likewise, the premium for taxis is Rs 6,500; and for passenger vehicles with a capacity of 35 persons, it is Rs 10,000. The premium for third-party insurance for heavy equipment is Rs 12,000.

“The premium was slashed after holding discussions with

insurance companies as government-owned vehicles are at low risk,” said Phatta Bahadur K.C., chairman of the IB. “Government vehicles usually do not operate at night and pose little risk to the lives of third parties.”

As most of the government vehicles are insured by the government-owned Rastriya Beema Sansthan (RBS), it will be affected by the decision of slashing premium. “There is

no benefit for us from motor insurance at all and slashing of premium will affect us badly,” said Nidan Raj Lamichhane, chief manager of RBS. “We were not consulted before deciding in this regard,” he added.

The government introduced mandatory third-party insurance last year in a bid to discourage the tendency of blocking the roads for compensation by the victims’ families. The kin of accident victims can get Rs 500,000 immediately in case of death. Victims of road accidents can claim treatment costs of up to Rs 200,000. Compensation for death or permanent disability amounts is Rs 500,000.

There has been a significant drop in road blockades following the introduction of third-party insurance.

http://www.ekantipur.com/2011/01/31/business/insurance-premium-for-govt-vehicles-halved/328896/