The Indian Railways has set the ball rolling for providing insurance cover to its passengers. Its tourism and catering arm Indian Railway Catering and Tourism Corporation (IRCTC) met officials of non-life insurance companies to work out the modalities of cover for passengers.
An official of a top general insurance company told Financial Chronicle that insurers have suggested offering three personal accident insurance policy options to passengers based on their class of travel.
A fixed cover for baggage loss has also been suggested. A personal accident cover would insure passengers against death and disability due to accidents. The railways carries 850 crore passengers in a year.
Insurance would be optional for passengers. Customers can avail of insurance while booking rail tickets online on the IRCTC platform. Those who book tickets offline, however, would not get the option.
“We suggested that travellers be given three personal accident insurance options to choose from, besides a fixed insurance component for baggage loss. The sum insured would differ according to the class of travel.
For second-class sleeper, we suggested personal accident insurance cover options of Rs 5 lakh, Rs 7.5 lakh and Rs 10 lakh and a fixed baggage insurance of Rs 5,000. For AC 3-tier class, AC chair car, the three options are Rs 7.5 lakh, Rs 10 lakh and Rs 15 lakh and a baggage insurance of Rs 10,000.
AC 2-tier travellers can choose from options of Rs 10 lakh, Rs 15 lakh and Rs 20 lakh. Baggage insurance cover for them is Rs 20,000. The three options for first class AC would be Rs 15 lakh, Rs 20 lakh and Rs 25 lakh and baggage insurance of Rs 20,000,” said an official of a public sector insurance company.
“Since there is a mad rush for reservation and in minutes people lose their chance of getting a confirmed ticket, the primary concern of travellers is to get reservation done and not buying insurance.
Therefore, we have suggested that travellers be provided a quick ‘NO’ option for insurance to help save their time rather than giving them an ‘YES’ option. Travellers need to do 120 days advanced booking and the insurance cover has to be bought on the same day of booking tickets,” said the insurance company official.
Insurance officials said that the premium would be as low as Rs 50-70 as the duration of coverage is less. Personal accident will cover accidental death and disability due to accidents.
Public sector insurers have suggested extending the coverage to provide medical treatment too as a general personal accident policy does not cover medical treatment.
Public and private sector insurers differed on the scope and duration of coverage:
IRCTC called four public sector insurers and some private insurers, ICICI Lombard General Insurance, Reliance General Insurance, Universal Sompo General Insurance.
Three public sector general insurers were of the view that the coverage should start from the time the person arrives at premises of the station platform till the time he is out of the premises of the destination station.
While one public sector general insurer and private insurers wanted coverage to start only when the train leaves the station and end immediately when the passenger alights on the destination station platform. Private players were also against providing baggage insurance since it would be difficult to asses the contents of bags.
Those opting for insurance after reserving their ticket would have to pay twice for payment gateway charges—once while booking the ticket and second time for booking insurance.
Insurance officials said that the IRCTC is likely to finalise the cover details soon and would then ask insurers to bid for providing the cover to passengers.
According to the information provided by Manoj Sinha, minister of state for railways, there were 123 rail accidents in 2012-13, 118 in 2013-14 and 135 accidents in 2014-15, 100 in 2015-16. He said 579 cases of claims of compensation to victims of rail accidents were still pending with various railway tribunals which are quasi-judicial authorities.
As regards grant of compensation provided to victims of rail accidents through rail tribunals, he had said during 2012-13 a compensation of Rs 3.18 crore was paid, while in 2013-14 a total of Rs 1.49 crore was paid and another Rs 1.27 crore paid during 2014-15.
During 2015-16, a total of Rs 1.1crore was paid as compensation to victims of rail accidents, he said.