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Broker urges higher coverage for minibus passengers
The time has long passed for Government to make changes to the legislation that will see passengers of minibuses and owners of vehicles being offered more protection, a well-known insurance broker has asserted.
The current insurance limits, as pertaining to auto coverage in case of accidents, date back to the 1970s and should be amended to reflect current times, says Bish Panday of P and P Insurance Brokers.
Insurance Broker Bish Panday
There have been complaints of hapless passengers who died or were severely injured in vehicular accidents, and whose families received a mere “pittance” from insurance companies.
The problem, Panday explained, lies in the current Insurance Act. While other forms of insurance exist, like the comprehensive policies, the current third party coverage has basic problems which are leaving holes in the pockets of Guyanese.
“Back in the ‘70s, if someone got into an accident, they could have received up to $20,000. That amount back then had the value of what was like US$20,000 ($4M). We can’t have people receiving $20,000 now.”
$5,000 (premium after no claim discounts) third party insurance for a normal car will only see coverage up to $300,000. This means if a vehicle has such insurance, and the driver knocks down a pedestrian, that pedestrian can only receive up to $300,000. The same goes for a vehicle that is damaged by the insured car in an accident.
However, the owner of a motor vehicle can opt for even lower limits of coverage (and still be compliant with the law) that could cost him $1,000 to $2,000 (after discounts) annually and see a mere $20,000 coverage.
In other words, the law makes it mandatory for an insurance policy to be taken out for vehicles, but the limit does not have to be more than $20,000.”
Of course, vehicle owners have been going higher, knowing full well of the dangers of having very low limits.
“Imagine ending up in an accident costing $600,000 to repair the other person’s vehicle. Your coverage is only $300,000. That means you are in the hole for $300,000.”
The situation with public transportation like minibuses makes the state of affairs even more critical.
Passengers will not receive more than $20,000-$25,000 each under most basic third party insurance.
Panday, in proposing the third party limits be raised, said that it should be somewhere in the vicinity of $500,000 for any one person and $1M for an accident, gradually increasing over a three-year period to $1.5M and $2.5M respectively.
“Yes, it will cost more, but it will also ensure that passengers and vehicles belonging to others are covered in a more meaningful manner.”
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