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The Bus & Car Operators’ Confederation of India (BOCI) on Monday said it has approached the regulatory insurance body, IRDA, seeking extension of vehicle insurance validity.
The private operators, who are members of various associations and federations affiliated to the BOCI, are seeking IRDA and government intervention for extension of vehicle insurance validity, it said in a statement.
BOCI is the apex body for public transport in India, representing private passenger transport operators. BOCI operators run 17 lakh buses in various segments and account for 30 crore passenger trips, amounting to over 80 per cent of all public transport in the country.
The public transport sector has been one of the worst hit by the lockdown and is reeling under heavy financial losses, the statement said. BOCI has reached out to various state governments and has also made representations to the Ministry of Road Transport and the Ministry of Finance to draw their attention to the plight of the public transport sector, it said.
Operators cite that vehicles have been grounded since the lockdown and that third-party damage is therefore 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,” it said.
Recently, the Centre announced extension of the 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 and other concerned documents. “This is the second time the government has extended this validity due to the lockdown. However, the government has not addressed vehicle insurance validity for comprehensive and third-party policy covers,” it said.
Public transport operators are on the verge of bankruptcy in the current situation, said Prasanna Patwardhan, President, Bus & Car Operators’ Confederation of India (BOCI). “We are under pressure from multiple sides, fuel price hikes, reduced capacity due to social distancing norms, loan EMIs, taxes, insurance premiums and much more. The ongoing financial burden with no revenue in the past quarter has pushed us to the brink of collapse. We urge the Insurance Regulatory and Development Authority of India (IRDA) and the Centre 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 the next one year. The validity extension sought will bring much-needed relief to an already stressed sector,” he said.
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 the lockdown began, he added.
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 tourist vehicles. Owners must pay about Rs 1 lakh a year towards insurance premium for a bus; this could go up to Rs 2 lakh for premium buses, he said.
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