Motor Vehicle Insurance Tariff Policy

Third party premium, minimum coverage raised

Published On: July 9, 2016 02:40 AM NPT By: Sagar Ghimire  | @sagarghi

KATHMANDU, July 9: The Beema Samiti has introduced a new motor vehicle insurance tariff policy, increasing the premium for third party motor insurance policy premiums as well as the minimum coverage.

Revising the motor insurance tariff directives, which will come into enforcement on July 16, the insurance market regulator increased the insurance compensation for both the driver and pillion rider of motorcycle to Rs 500,000 from the existing Rs 100,000. This means that the next of kin will receive Rs 500,000 each as compensation in the case of death of driver and the pillion rider.

Premium, however, differs with the capacity of motorbikes.

"We have decided to revise the policy premium and compensation amount in line with the budget for Fiscal Year 2016/17," Shreeman Karki, a director of Beema Samiti, told Republica.  

Similarly, the Samiti has also increased compensation for passengers travelling in public vehicle as well as the third party. According to the new directives, the insurance claim amount for per passenger is set at Rs 500,000. Similarly, medical insurance compensation coverage has also been hiked to Rs 300,000 per person for motorbike driver, pillion rider, automobile passenger, staff and the third party. Earlier, such compensation amount was Rs 100,000 for the passenger and third party for automobiles, while it was only Rs 5,000 each for bike driver and pillion rider.

The Samiti has also increased the premium fee of motor insurance in line with the coverage amount. While owners of motorbike will have to pay additional Rs 500 per year for insurance, automobile owners will have to pay total premium of Rs 700 per seat. Compensation covering ambulance cost of Rs 10,000 to take the injured person to the hospital, and Rs 500 per day for up to 45 days for the attendant of the injured person and 25 percent discount on premium for disabled-friendly motorbikes are some of the highlights of the new directive.

While there are concerns about the rise in premium fee, insurance expert at the Samiti, Bhoj Raj Sharma, told Republica that the premium was not so high compared to the compensation amoun“. "The tariff and compensation amount was set following consultation with wide range of stakeholders including the insurers. The premium fee for motorbike has not been increased in proportion to compensati”n," Sharma, who was also involved in the review and consultation of the directives, sai“. "The liabilities of motorbike alone stand at Rs 1.6 million. However, the premium has been increased by only Rs 5”0."

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