THE act liabilities motor insurance, or third-party motor insurance, is not in force now after the enforcement of Road Transport Act 2018. In this situation, owners of owners seem to have been benefited, but in reality, they would lose in the long run. The cancellation of the act liabilities motor insurance has put the insurance sector in trouble.
While the government is losing revenue in crores of takas, there is no system to meet the security and financial losses of people. Owners are not also protected against financial losses in the absence of insurance.
Under the act liabilities motor insurance earlier, if any client died in an accident, Tk 20,000 was allowed in benefits for individuals and Tk 50,000 in case of property damage in compensation. This insurance should be updated, rather than discontinued.
Insurance companies earlier paid the claim if the claim was filed with all the documents required to get the act liabilities motor insurance. That claims are not paid by the insurance companies is largely a misconception. The act liabilities motor insurance is in force in most countries. No vehicles can run on the road with the insurance. The insurance is provided by the insurance companies.
If the act liabilities policy can be reintroduced, with updates and some modernisation, it will help the insurance sector. if any car travels to neighbouring countries from Bangladesh, it cannot cross the border without the act liabilities motor insurance. Again, it can also cover damage caused by boat or ferry accidents.
When the sole breadwinner of a family dies, no one but the victim family can understand the gravity of the situation. As a result, if vehicles are covered by insurance, the victims benefit. Even the vehicle owners who lose business capital can benefit from this. If everyone has a sense of responsibility, others can also benefit from it. If the affected people get the compensation for the property, they may be able to get back to work again.
The act liabilities motor insurance product could be modified. The benefits for individuals could be Tk 200,000 instead of Tk 20,000. The property damages should be Tk 300,000 instead of Tk 50000.
Claim procedures should be simplified, calling for only general diary filed with the police, police investigation reports, death certificates from chair or councillors of union council, municipality, death certificate from hospital or registered physicians, and the copy of the national identity card. In case of property damage, police reports should be considered valid documents.
If clients agree to reduce the act premium by 30 per cent of benefit for each and every loss, 40 per cent of the premium may be discounted from the net premium. If clients agree to reduce the act premium by 50 per cent of benefit for each and every loss, 45 per cent of the premium may be discounted.
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Ahmed Saifuddin Chowdhury is chief executive officer of BGIC Plc.
