Bus & Car Operators Confederation of India (BOCI), the apex body for public transport in India has sought the extension of vehicle insurance validity by one year and has approached the Insurance Regulatory and Development Authority of India (IRDAI) for the same.
The BOCI operators, which represent private passenger transport operators, run 17 lakh buses in various segments and accounts for 30 crore passenger trips, amounting to over 80% of all public transport in the country.
The private operators who are member of various associations & federations affiliated to BOCI are seeking IRDA and government intervention for extension of vehicle insurance validity.
BOCI said in a statement that the public transport sector has been one of the worst hit with the lockdown due to COVID-19 pandemic and is reeling under heavy financial losses.
While the government recently extended the validity date of motor vehicle documents such as validity of fitness, permit (all types), driving license, registration, etc., up to September 30, 2020, it hasnâ€™t addressed the vehicle insurance validity for comprehensive and third-party policy covers.
The operators say that with vehicles being grounded since the lockdown, any possibility of third-party damage is ruled out. Since major part of the premium amount is paid towards third-party damage, the insurance companies should increase validity equal to number of lockdown days.
With no income, operators say they will not be able to pay premiums, leading to large number of defaults as they have not been able to operate since lockdown began.
BOCI claims that operators are collapsing and shutting down operations and this will have a serious ripple effect on public life and livelihood of millions of families who depend on the sector for their survival.
Prasanna Patwardhan, President, Bus & Car Operators Confederation of India (BOCI) said, â€śThe public transport operators are on the verge of bankruptcy in the current situation. We are under pressure from multiple sides, fuel price hikes, reduced capacity due to social distancing norms, loan EMIs, taxes and insurance premiums and much more.â€ť
BOCI has also reached out to various state governments and has also made representations to Ministry of Road Transport and Ministry of Finance to draw their attention on the plight of public transport sector.
â€śWe have written to the IRDA requesting an extension of insurance coverage for all transport vehicles. 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 as tourist vehicles. Owners must pay about Rs 1 lakh a year towards insurance premium for a bus. This might go up to Rs 2 lakh for premium buses,â€ť Prasanna added.