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Old 15th May 2018, 14:20   #1
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Default Compensation for road accident victims increased 10-fold

The government has announced a 10-fold increase in the minimum compensation payable to road accident victims.

Compensation for road accident victims increased 10-fold-accident.jpg

According to a media report, the minimum compensation in case of death in a road accident has been increased from Rs. 50,000 to Rs. 5 lakh and for permanent disability will be in the range of Rs. 50,000 to Rs. 5 lakh depending on the extent of disability. Both amounts will increase by 5% annually. Earlier, the default compensation for a permanent disability was Rs. 25,000.

The figure was selected based on the average compensation paid from the years 2011-12 to 2015-16. The claim amount ranged between Rs. 3.00 - 4.90 lakh. This move is expected to cut down on the total number of cases that go to litigation.

If the victim believes they deserve higher compensation, they can pursue the case in the Motor Accident Claims Tribunal (MACT). In this case, the compensation will be paid based on a structured formula under Schedule-II of the Motor Vehicles Act 1988. It is rumoured that this will cause an increase in the third-party insurance premiums.

Source: Times of India

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Last edited by TusharK : 15th May 2018 at 14:21.
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Old 15th May 2018, 17:43   #2
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Default Re: Compensation for road accident victims increased 10-fold

pardon my ignorance but who is going to pay the compensation amount, the insurer?
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Old 15th May 2018, 21:36   #3
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Default Re: Compensation for road accident victims increased 10-fold

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Originally Posted by gatsby_great View Post
pardon my ignorance but who is going to pay the compensation amount, the insurer?
If that's the case (most likely, since that's what insurance is for) can we assume the insurance premiums too will go up by 10x, or at least by 5x?
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Old 15th May 2018, 22:00   #4
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Default Re: Compensation for road accident victims increased 10-fold

The article does mention that third party insurance premiums are likely to go up. However, it is unlikely that there is such direct correlation between minimum compensation and insurance premiums.
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Old 15th May 2018, 22:36   #5
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Default Re: Compensation for road accident victims increased 10-fold

Third Party insurance component for your car's insurance has been going up since last 3 years at least. Just check the policies for last 2-3 years and the breakup of the premium that you pay.
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Old 16th May 2018, 16:22   #6
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Default Re: Compensation for road accident victims increased 10-fold

Third party insurance premium may go up significantly. It will hurt old car owners the most where the third party component is already more than the actual insurance amount for small to mid segment cars which are 6-7 years old or more.
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Old 16th May 2018, 18:44   #7
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Default Re: Compensation for road accident victims increased 10-fold

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Originally Posted by gupta_chd View Post
Third party insurance premium may go up significantly. It will hurt old car owners the most where the third party component is already more than the actual insurance amount for small to mid segment cars which are 6-7 years old or more.
Third party insurance increases every year. If you check your insurance paper, the insurance company clearly states that "As per IRDA rules/notification TPI has been increased after April YYYY". Hence, the overall insurance price plus applicable GST, the total price never goes down as per our calculation even if the NCB is a good %.
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Old 17th May 2018, 15:00   #8
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Default Re: Compensation for road accident victims increased 10-fold

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Originally Posted by pranavGTI View Post
Third party insurance increases every year. If you check your insurance paper, the insurance company clearly states that "As per IRDA rules/notification TPI has been increased after April YYYY". Hence, the overall insurance price plus applicable GST, the total price never goes down as per our calculation even if the NCB is a good %.
Actually, there is no link between NCB and third party component. NCB is not applicable on TPC. TPC is decided by IRDA each year. Unless IRDA plans to increase it, there would be no increase or IRDA may satiate insurers with marginal increase. But with such regulations, IRDA is bound to change TPC with worthy increase.
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Old 31st May 2018, 16:17   #9
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Angry Re: Compensation for road accident victims increased 10-fold

This was expected.

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The general insurance industry is staring at a loss of anywhere between Rs 10,000 crore and Rs 25,000 crore in the next few years, and motor insurance premium rates may rise after the government increased compensation for third-party deaths tenfold to Rs 5 lakh.
https://economictimes.indiatimes.com...w/64379974.cms

Quote:
The ET report citing industry experts said that third-party motor insurance rates may go up by 20-30 per cent due to this, which will be in addition to the revision in rates every year based on actuarial assumptions and performance of the portfolio.
http://www.timesnownews.com/business...res-why/233667
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Old 19th June 2018, 10:47   #10
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Default Re: Compensation for road accident victims increased 10-fold

This article reminds me of the justification for the fact that the money being spent on Dash Cam being worth it down to the last penny.

An entry level Dashcam with GPS features is a must and makes a huge impact in our peace of mind especially while travelling through unknown places.

Last edited by COMMUTER : 19th June 2018 at 10:57.
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