Andhra’s saddening bus tragedy tells us why travel insurance should be made mandatory

Despite the high number of road accidents in India, there is no uniform pan-India scheme that caters to insuring people who travel by bus.
Andhra’s saddening bus tragedy tells us why travel insurance should be made mandatory
Andhra’s saddening bus tragedy tells us why travel insurance should be made mandatory
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On Tuesday, Andhra Pradesh woke up to the news of the Diwakar travels bus accident, which claimed 11 lives and injured over 40 people.

The same night, Chief Minister Chandrababu Naidu announced that the victims of the tragedy covered under the Chandranna Bima Scheme would get Rs 5 lakh compensation. Others who were AP residents but not under the scheme would get Rs 3 lakh, and non-residents of Andhra would be given Rs 2 lakh.

While it is common for governments to announce ex gratia compensation in the face of tragedies like this, the amounts generally tend to vary arbitrarily. A lot depends on the politics of the day and the scale of the tragedy.

Travel insurance on the other hand, ensures that in case of a mishap, the victim and/or their family are liable to claim a certain amount.

For instance, IRCTC announced that from September 2016, passengers could choose to pay a premium of Re 1 on e-tickets (excluding those for suburban trains) and in case of death or permanent total disability due to a mishap, they and their families would be eligible for a compensation of up to Rs 10 lakh.  

The amount would reduce to Rs 7.5 lakh for permanent partial disability, Rs 2 lakh for hospitalisation and Rs 10,000 would be awarded for “transportation of mortal remains in the event of death or injury from a train accident or other 'untoward incident' including terrorist attacks, dacoity, rioting, shoot-out or arson, as well as for short termination, diverted route and Vikalp trains.”

In case of Air India, the state-owned airline, passengers can choose to pay a premium of Rs 150 for similar compensation. India is also a signatory of the Montreal Convention, which details how much compensation Indian passengers are liable to under different circumstances including death and injury.

Road transport, which falls under the concurrent list of Schedule 7 of the Constitution, neither the state governments nor the central government have made any provisions for insurance.

“Their priorities are different on a day to day basis, and ensuring that passengers’ lives are insured on a systemic level doesn’t figure there often,” says Saji Cherian, Director Operations at Save India Foundation, an NGO working on issues of road safety. Saji claims that the compensation announcements are usually knee-jerk reactions by the government.

He points that there are a few central schemes already in place, like Pradhan Mantri Suraksha Bima Yojana, which should be popularised more. The scheme provides a one-year cover (renewable annually) for accidental death and disability on an annual premium of Rs 12. And while the amount can only go up to Rs 2 lakh, it is in addition to any other insurance the individual is covered under.

While Tamil Nadu, Andhra Pradesh and Telangana do not have a uniform insurance or compensation scheme, Kerala implemented one for its state-owned buses - traveling intra-city, intra-state and inter-state - in April 2015.

Sharaf Muhammed, the executive director of the Kerala State Road Transport Corporation told TNM that the scheme is being implemented, but was quick to clarify that it did not come about because of public pressure, rather because “we are aware that the safety and responsibility of our passengers are bestowed on us.”

However, the insurance cannot be seen completely as a life insurance. “It is aimed at providing immediate relief to passengers. They will eventually approach the court under provisions of the Motor Vehicle Act, but it would take a long time for the insurance company to pay up the sum. This is aimed at ensuring that that they get immediate financial assistance," he explains.

Karnataka State Road Transport Corporation (KSRTC) has an insurance scheme for its employees (making the dependents eligible for Rs 3 lakh in case the employee dies while in service) and a relief fund trust for passengers to provide “immediate financial relief to the legal heirs of the deceased passengers.”

Aggregators which allow users to book various public and private buses may have an option for travelers to pay a premium to be eligible for insurance. However, it varies from provider to provider.

Noor Ahmed Ali, general secretary of Andhra Pradesh and Telangana Bus and Rail Users Welfare Association insists that insuring passengers should be made compulsory, regardless of whether they are traveling in state-owned or private buses.

Referring to the different amounts of compensation awarded in the Andhra bus accident, Noor also says that compensation amount should be fixed and not vary based on a scheme. “Loss of life is loss of life. In the same tragedy at least, they should not differentiate between the those deceased,” he argues.

Noor believes that having a uniform compensation or insurance scheme will put pressure on privately-owned bus services, especially because they often make the family of the deceased or injured run pillar to post to claim compensation. “And in cases where a body has gotten burnt beyond recognition, it is even more difficult for the next of kin. There are also many delays, sometimes spanning years,” he says.

Saji says that insurance should not remain optional, which it currently is. While railways and air travel provide insurance, it is optional as of now. It is a habitual problem also, where people may not pay the reasonable premium amount even when they have the option, he says.

“There should however be a cap on the premium so that the ticket prices don’t shoot up. And if that’s the argument that’s used against making it a mandatory part of travel – India loses billions annually to road accidents. I’m sure we’d have to pay less premium than that,” Saji says.


(With inputs from Priyanka Thirumurthy and Megha Varier)

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