Union leaders object to rise in third party insurance rates

Times of India: Pune: Wednesday, March 19, 2014.

Autorickshaw union leaders Baba Adhav and Nitin Pawar have submitted their objections to the Insurance Regulatory and Development Authority (IRDA) against increase in third party insurance premium. The leaders have argued that the insurance amount claimed is very low as compared with the premium.

The insurance premium is proposed to be increased by Rs 800 from the ensuing financial year. Autorickshaw drivers say they are already paying a premium of Rs 3,300 annually, which is on the higher side. Every year, autorickshaws have to undergo fitness tests and for getting the certificates, payment of third party insurance premium has been made mandatory.

Baba Adhav, president of Rickshaw Panchayat, and Nitin Pawar, general secretary of the joint committee of Maharashtra autorickshaw owners and drivers organization, said higher the risk, higher the premium, and vice-versa is the basic principle of insurance. Accidents involving autorickshaws are negligible and yet the insurance premium increases every year, Pawar said.

According to Pawar, an estimated 6.5 lakh autorickshaws ply in the state. Considering that payment of insurance premium is mandatory, a whopping Rs 214 crore is collected every year, that too from only from one state. Assuming that only 50% of the premium is paid, still about Rs 107 crore is collected every year. Pawar said information procured under RTI from insurance companies shows that the amount claimed for accidents is just 3% of the total premium.

Demanding that the premium should not be increased, the organizations said the amount must be restructured and prescribed realistically as per data. A delegation led by Adhav and Pawar along with the representatives of insurance workers' organization and other members recently met IRDA officials in Hyderabad explaining them the demands and issues, particularly in Pune where drivers are facing problems due to inadequate number of CNG and LPG outlets and stringent operating rules. Insurance officials said all the issues raised by the organizations will be considered.

·       Third party insurance premium for autorickshaws is very high as against accident claims. Currently, drivers are paying an annual premium of Rs 3,300.

·       Passenger carrying vehicles are clubbed together. There should be separate criteria for vehicles carrying three passengers.

·       Per passenger premium should be based on proper criteria.

·       Zonal classification should be done on the basis of actual claims.