75 pc bikes sans insurance cover

REPUBLICA
KATHMANDU, April 7: Though the government has made insurance of vehicles mandatory, some 75 percent of the total motorbikes registered with the government do not have insurance coverage - a case that reflects blatant defiance of the rule.

According to the Department of Transport Management (DoTM), around 744,000 bikes are registered with the government. But owners of only 190,695 of them have bought insurance coverage, shows insurance data compiled by the Insurance Board (IB), the insurance sector regulator.


“More than 554,000 bikes are still without insurance coverage. This is alarming,” said Shreeman Karki, deputy director of the IB.

The insurance regulatory authority doubts that most of the motorcycle owners could be producing fake insurance documents to get their ownership documents renewed. Such suspicion surfaced mainly as DoTM records show majority of owners have renewed their ownership documents and for that they have produced insurance documents, as provisioned in the law.

“Going by the records of DoTM´s, it seems that all motorcycles have due insurance cover. But statistics provided by the insurance companies suggests that only 25 percent of existing motorcycle owners have actually bought the insurance policy,” said another IB official.

Sources said contradictory reports lead to only two conclusions: either DoTM is renewing motorcycles without insurance document or fake insurance document is widely in use.

The IB as a government agency believes it is impractical for DoTM staff to renew such a large number of motorcycles without necessary document, and believes wide use of fake insurance documents was most probable reality.

The situation has baffled the insurance regulator and also posed serious challenges to it. Production of fake insurance document is a serious crime and calls for actions against forgery.

Authorities concerned are worried as the owner will simply have no insurance cover to meet the liability, particularly third party liability -- the very cover for which the government had made insurance of vehicles mandatory, in case of accidents.

“We are still to check records of four-wheelers. We suspect the situation might be the same,” said the source.

Given the situation, IB has pushed for more coordinated actions between the board and DoTM. It has also recommended the DoTM to cross-check with concerned insurance companies to ascertain whether the document produced is genuine.

Mandatory insurance of vehicle that came into effect in 2009/10, meanwhile, increased premium earning of 17 general insurance companies to Rs 433.10 million from insurance of bikes alone. If all the bikes owners had complied with the law, they would have enjoyed premium of over Rs 1.25 billion, says IB.

Nonetheless, as companies received claims worth Rs 128.63 million, they altogether enjoyed a profit of Rs 304.47 million from insurance of bikes alone.


Published on 2011-04-07 03:00:25

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