Cancel third party insurance of the vehicle. What will be the compensation in case of an accident?

In the case of vehicles in Bangladesh, the country's Insurance Development and Regulatory Authority (IDRA) has issued a notification cancelling third party risk insurance or third party insurance. This 'third party insurance' was used to compensate if a person was injured or killed by a vehicle. Or if any property or other vehicle was damaged. In other words, third party insurance is the name of insuring to compensate for the loss outside the driver or passenger.

But the Road Transport Act 2016 in Bangladesh does not make it compulsory to have third party insurance for vehicles. This change has been made in insurance in keeping with that law.

What has been said in the IDRA notification?

According to the IDRA notification, Motor Vehicles ordinance, 1983) Ordinance no. LV of 1983) (Third Party Insurance or Act Liability) was mandatory. The Ordinance repealed the Road Transport Act, 2016 (Act No. 46 of 2017).

Sub-sections ((1) and (2) of section 80 of the Road Transport Act, 2016 have been enforced:

Passenger & Motor Vehicle Insurance -

  1. If it, the owner or organization of a motor vehicle may so desire to ensure the life and property of the number of passengers specified for the transport of any motor vehicle owned by him.
  2. The owner or organization of the motor vehicle shall ensure the motor vehicle is operated under it regularly. The loss or damage of the motor vehicle shall be covered by the insurance and shall be entitled to receive appropriate compensation from the insurer.

Third-party risk insurance has been cancelled for this reason.

An official of the insurance authority said that after the road law was enacted, the finance minister was directed to repeal the rule of third party insurance. Because even if it is done for legal reasons, it does not work in practice. After cancelling such policies, the insurance companies have been instructed.

What are the advantages and disadvantages of third party risk insurance?

Officials say that even though third party risk insurance was previously offered in Bangladesh, the maximum limit for compensation was Tk 20,000. But even if insured, the rate of claiming this type of insurance is much lower.

According to the Bangladesh Passengers Welfare Association report, in 2017, there were 5,514 road accidents across the country. A total of 6,221 people lost their lives in this. 15 thousand 46 people were injured. The previous year, in 2016, 6,397 people were killed in 4,989 road accidents. The number of injured was 18 thousand 193 people.

But none of them received any insurance compensation.

Sheikh Kabir Hossain, president of the Bangladesh Insurance Association-BIA, also said, "These policy owners are doing it out of legal obligation. Rather, comprehensive insurance will benefit both the owner and the insurance company."

However, Mozammel Haque Chowdhury, secretary-general of the Bangladesh Passengers Welfare Association, said that even then, there was a system of compensation for the victims of the accident. But the people's place was closed. But in the new law, it is no more.

He suggested that funds and vehicle owners should be required by law to pay compensation to the injured passengers or the general public.

So how will the victims of the accident be compensated?

According to the concerned, there is no real compensation for the victims of road accidents.

According to the Road Transport Act 2018, a fund has been set up for the victims of road accidents.

From that fund, five lakh rupees has been promised for those killed in the accident and three lakh rupees for the injured.

However, Mozammel Haque Chowdhury, secretary-general of the Bangladesh Passengers Welfare Association, said that two years after the law was enacted. 

No policy has yet been formulated on the use of the fund. A committee is to be formed with government officials and representatives of employers and workers to manage the fund. That, too, was not formed. No passengers or ordinary people were represented on the committee.

As a result, he is sceptical about how much the fund will benefit the victims of the accident.

However, Md. Dalil Uddin, a member of the Insurance Development and Regulatory Authority, said they are now thinking about what can be done in case of a vehicle accident.

What is the cost of any insurance?

The law provides for optional insurance for vehicle passengers.

However, suppose the first party is insured. In that case, compensation is available if the car is stolen or snatched, broken, or damaged in a storm. 

Insurance money is also available for physical damage to the driver and passenger if the condition is met. According to insurance companies in Bangladesh, the maximum premium for third-party insurance for motorbikes is Tk 259. 

On the other hand, its premium in First Party Insurance is from a minimum of Tk 4,082 to a maximum of Tk 4,902.

Third-party insurance for sedans has a minimum premium of Tk 414 and a maximum of Tk 759. The premium for first-party insurance is a minimum of Tk 74,063 and a maximum of Tk 1,19,736.

In the case of buses, the minimum premium for a third party is Tk 1,909, and the maximum premium is Tk 2,026. On the other hand, the maximum premium in first-party insurance is 4 lakh 8 thousand 228 rupees.

Third-party insurance for trucks has a minimum premium of Tk 72 and a maximum of Tk 3,081. The maximum premium of first-party insurance is 99 thousand 356 Tk.

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