Chandigarh, December 21: Call it sheer laziness or lack of awareness, almost 70-75% of two-wheelers plying on Punjab and Haryana roads are uninsured, despite motor insurance being mandatory under the law.
According to insiders, besides riders, even insurance distributors have never shown interest due to low margins in renewing insurance cover for two-wheelers. As per law, it is mandatory to have an insurance cover when vehicles are purchased for the first time, but in many cases, they are not renewed in subsequent years.
In case of four-wheelers, the percentage of uninsured vehicles is in the range of 15-20%.
As per the statistical abstract of Punjab, in 2016-17, around 75 lakh two-wheelers were plying on the state roads. Similarly, in Haryana, the number of two-wheelers was around 60 lakh.
“According to estimates, in case of two-wheelers, by the second year, a majority of the owners do not renew the insurance,” said a senior executive working with a private insurance company.
On an average, around 54,000 two-wheelers are sold across the country every day and the northern region comprising Punjab, Haryana, Chandigarh, Himachal Pradesh, Jammu & Kashmir, Uttar Pradesh, Uttarakhand and Rajasthan contribute 30% to the total sales.
“Almost 70-75% of the two-wheelers in the region are uninsured. The penetration of motor insurance in cities is better than the rural areas. A very low percentage of owners renew their policies because of laziness and lack of awareness,” said Aman Dhall, Head of Communications, PolicyBazaar.com Group.
Senior executives pointed out that lack of enthusiasm in renewing the policy by the agents and distributors was also one of the main reasons. “Normally, an agent gets less than Rs 100 as commission in renewing a two-wheeler policy. So they find it less attractive to renew the policy and instead prefer to renew the policy of four-wheelers where margins are lucrative,” said an executive working with public sector insurance company.
In order to address the low penetration of motor insurance in two-wheelers, the insurers suggested that the state government should map the registered vehicles’ database from Regional Transport Offices (RTOs) and insured vehicles’ database from insurance companies. On the basis of information, they can send notices to vehicle owners. They said stricter implementation of law by the traffic police was also a need of the hour.
Perturbed over low compliance rate across the country, the Supreme Court has made third party motor insurance mandatory for two-wheelers for a period of five years and three years for four-wheelers.
A third-party policy only covers the damage to a third party and property involved in the accident but it does not cover any damages to the bike belonging to the policyholder. On the other hand, a comprehensive policy provides an overall coverage.
Source Tribune India
