The total number of motor vehicles as of May 31st this year is 114,277
Dechen Dolkar from Thimphu
More than half of the vehicles in the country have not been insured though the Road Safety and Transport Authority (RSTA) Act 1999 mandates that every vehicle owner must insure their vehicle with an insurance company.
The RSTA Act states that the owner of a motor vehicle must not drive or allow his or her motor vehicle to be driven on a highway or public road without a current contract of insurance, either comprehensive or third party. It also states that the owner or the driver of a motor vehicle will on demand by the authorized person or the police officer; produce the certificate of insurance for inspection, and that a person failing to produce a valid certificate of insurance on demand is guilty of an offence and liable for penalty prescribed in section 50.
Similarly, the RSTA rules and regulations also states that a taxi must have a comprehensive insurance policy. According to the records maintained by the RSTA, the total number of motor vehicles as of May 31st this year in the country is 114,277.
However, as per the records of the two insurance companies in the country, only around 54,000 people have motor insurances so far. The manager of general insurance department of the Royal Insurance Corporation of Bhutan Limited (RICBL), Jeewan Dahal said the third party insurance is compulsory a vehicle owner must insure with an insurance company. He said that it is not made compulsory by the insurance companies, but it is required by the RSTA Act which benefits all the people.
Meanwhile, the minimum premium for the third party is Nu 1,100 for a four-wheeler vehicle. However, it also depends on the type of the vehicle. The benefits of a third party insurance policy vary from Nu 10,000 to Nu 30,000. If there is an injury of a third party person the benefit is Nu 10,000, for death of a person the benefit is Nu 20,000, and if there is permanent disability in a person the benefit is Nu 30,000.
He said if there are damages on somebody’s property, the benefit amount is up to Nu 500,000 for four-wheelers. It also covers personal accidents, meaning if there are passengers in one’s own vehicle. For comprehensive insurance, Jeewan Dahal said the premium will depend on the value of the vehicle. He said that there are a number of factors that will determine the premium of a comprehensive insurance policy.
However, the financial institutions, which finance the vehicle loan, make it compulsory for the vehicle owners to have a comprehensive insurance policy to cover the risks. The manager also said that the comprehensive insurance policy will also cover non-accidental risks like fire and damage by flood. And to claim insurance, one has to firstly report to the police and the police have to make an accident report, which will be kept as evidence. The manager said that along with the police report, copies of documents like vehicle registration book, fitness paper and licenses need to be submitted to the RICBL.
“Many people are reluctant to insure their motor and people have misconceptions,” he said. The General Manager of insurance department of the Bhutan Insurance Limited, Sonam Tobgay said that a motor insurance plan financially protects an individual against exorbitant costs incurred in repairing one’s vehicle as well as against damages to any other properties due to motor accidents. He said that even according to the motor vehicles act, it is mandatory to purchase a third party liability insurance policy.
As of date, the BIL has around 14,000 motor vehicle insurance policies and the total motor vehicle insurance claims so far have been 5,078. He added that by investing a small amount now in one’s own protection, one can help avoid costly expenses in the future. Coverage such as collision, property liability and bodily injury liability under motor insurance plan can help cover the costs of expensive claims if an accident happens. He said apart from the financial protection/ security, such insurance plans also help in saving time and hassles for a vehicle owner as the insurance company helps in managing the entire process after an accident occurs.
“It takes a maximum of two weeks to get the money. We provide the claim as soon as we get the final settlement from the workshop,” he said, adding that they have also requested the workshops to repair the vehicle faster so that vehicle owners can claim the insurance.