Kathmandu, July 8
Come July 16, and owners of two-wheelers can insulate themselves with insurance coverage of over Rs 6.6 million by paying a premium of as little as Rs 1,500 per year.
This premium amount will provide cover of Rs 500,000 each to two-wheeler driver and a pillion rider in case of loss of life or permanent disability during a road accident, according to the Insurance Board, the insurance sector regulator, which revised its Motor Insurance Premium Directive today.
The revised premium rate has also enabled two-wheeler driver and a pillion rider to seek for compensation of up to Rs 300,000 each to cover medical expenses. Each of them can also hire a medical helper at the cost of Rs 500 per day for up to 45 days.
Insurance companies can, however, deny to extend these payments if policyholders were found to be driving under influence or if accidents were premeditated.
Currently, the driver of a two-wheeler and a pillion rider are entitled to compensation of Rs 100,000 each in case of death or permanent disability. If they are hospitalised, the driver and pillion rider cannot claim for more than Rs 5,000 each for medical expenses.
“We have drastically raised the coverage amount for users of two-wheelers as they are vulnerable to road accidents,” IB Director Shreeman Karki told The Himalayan Times. “And we have managed to make these changes to the coverage amount by raising the annual premium fee by just Rs 500.”
To purchase the new insurance policies, owners of two-wheelers with engine capacity of less than 150cc will have to pay annual premium of Rs 1,500, excluding taxes. For owners of two-wheelers with engine capacity of 150-250 cc, the annual premium has been fixed at Rs 1,700 (excluding taxes), while owners of two-wheelers with engine capacity of over 250 cc have to deposit premium of Rs 1,900 (excluding taxes) per year.
These premium rates will come into effect from the beginning of the next fiscal year, or July 16, according to the IB, which has informed all 17 non-life insurance companies in the country about the latest changes and instructed them to work accordingly.
“If existing policyholders wish to upgrade to the new policy, they can do so by paying some extra fee. But this has to be done within the month of Shrawan (July 16 to August 16),” Karki said, adding, “We have already sent a circular to insurers in this regard.”
The latest revision made to the premium rates, however, has not brought about changes in third-party liability coverage.
Third-party insurance enables policyholders to claim for compensation if their vehicles kill or injure people or damage properties during road accidents.
Currently, owners of two-wheelers can claim for up to Rs 5 million in compensation from insurance companies under third-party liability. This includes compensation of up to Rs 2.5 million to cover losses of human lives or cover medical expenses of people injured in the accident.
Compensation of another Rs 2.5 million is provided to restore properties damaged during accidents.
A version of this article appears in print on July 09, 2016 of The Himalayan Times.