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Frequently
Asked Questions
If I need to make a change
to my policy who do I contact?
Please contact your agent or nearest RICBL office. He/She can
make the change with the company and keep all copies of changes
on file.
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Do I need to file a police
report if I'm involved in an auto accident?
Yes - Always file a police report for your advantage. The insurance
company may have problem processing the claim without the written
evidence from Police, the accident that may or may not be your
fault based on not filing a police report.
- Who do I call if I have
claim to file?
Most cases you would contact your nearest RICBL office
- Kuenselonline discussion
...?
It is very heartening to note that the issue on the revision
of compulsory Third Party Liability Insurance Premium had be
brought on the floor of Kuensel-on-line for discussion as this
not only gives us the opportunity to clarify this particular
issue to all our valued clients but also the basic needs and
logics behind the incorporation of it as compulsory in the Road
Safety and Transport Act of Bhutan. We also would like to extend
our sincere thanks to all the authors of the letters posted
therein, for you all have shown your deepest concern in this
matter of great importance, not only to RICB but also to all
the vehicle owners in Bhutan. We highly commend on your valuable
criticisms and hope that this trend will continue in the future
for they are the strength of our aspirations to urge and pave
ways to improve our services to the citizens of this proud nation
and the Tsa Wa Sum at large.
- What is Insurance?
Insurance in laymen’s term is a fund raised with accumulation
of money by way of premium from many fortunate to assist and
help recover the few less fortunate financially, who incur loss.
The basic concept behind is to bring back the individual in
the same financial position, as he was just prior to the loss
only and nothing further. Insurance as many Bhutanese think
and take, is not an investment where one is expected to always
get back his money but its rather a practical tool to reduce
your financial vulnerability to the loss causing risks NOR is
Insurance a social institution to help and care the people in
financial distress.
- What is the logic of having
the Third Party Liability Insurance compulsory? Why is it a
must for obtaining fitness certificate?
Any vehicle that plies on the road at any time and in any place
do pose some kinds of accidental threat in one way or the other
to the third parties, be it the other road user, pedestrians
or the properties along the road. Accidents when occurs can
never be predicted nor its magnitude definable. The liability
that exists under such circumstances cannot be eliminated unless
the use of vehicle itself is aborted and with this very reason,
this issue of great concern was brought in the forefront by
the authorities whereby the Third Party Liability Insurance
was made compulsory with incorporation of it in the Road Safety
& Transport Act – 1999, Division 6, Clause No. 50 of Bhutan,
after getting the Act duly endorsed and passed by our National
Assembly. This practice prevails elsewhere in the world too.
Thus, if the vehicle is fit to ply on the road then it is also
a must for the vehicle to have atleast the Third Party Liability
Insurance Cover to safeguard the public liability in stake while
you are behind the steering.
- Why was the Third Party
Liability Insurance Premium revised drastically this year?
Initially, the cover under fatal injury was death only and the
claim/compensation payable was limited to Nu. 4000/-. In view
of this minimal amount payable, the same was then increased
to Nu. 10,000/-. Further, in considerations of the financial
circumstances that would prevail around the unfortunates, this
amount of compensation/claim being unrealistically low was then
further increased to Nu. 20,000/- and in addition to this, an
extension of extra covers for a) minor injuries up to Nu. 10,000/-
and b) permanent disablement up to Nu. 30,000/-, was incorporated.
During all theses enhancements, the amount of premium remained
constant at Nu. 20/- per person only.
Since the premium payable for life insurance under the RGoB’s
social scheme for rural population with cover of Nu. 10,000/-
against death and without any compensation for minor injuries
is Nu. 50/-, the revision in the Motor Third Party premium to
Nu. 150/- per person was found most necessary in order to protect
the unbiased general premium-rating rule that governs the Insurance.
Earlier our basic premium on account of third party property
damage for private Cars and Hilux/Land Cruisers were Nu. 160
and 240, which are now revised to Nu. 250/- and 410/- respectively.
Thus the overall increase is 56.25 % only and not 185 % as mentioned
in one of the letter. Now with the drastic increase of the vehicle
population in the country, the numbers of third party liability
claims too have increased tremendously. The settlements of these
third party liability claims/compensation within Bhutan also
have become very expensive due to the steep raise in cost of
spares and materials in the market. To add on this, the large
number of Bhutanese vehicles plying in India, when meets with
an accident has to abide by the Indian Motor Vehicles Act. Since
our insurance cover holds good in cross border vehicle travel
too, the No Fault Liability payable immediately after accident
as per Indian Act is Nu. 50,000/-. The actual claim/compensation
awarded by the Indian Motor Claims Tribunal Court normally as
per our past experience is Nu. 200,000/- minimum excluding the
No Fault Liability amount already paid and this amount further
increases if the cause of the accident is proved as negligence
of the driver.
The Motor Insurance Tariff of India had undergone several revisions
during the period from 1992 to 2001 resulting in an increase
in the premium amount by many folds till date while the RICB
had not revised our Tariff till date since 1992 despite the
numerous enhancements in the extent of cover, amount of compensation
payable and drastic increase in the number of vehicles plying
on road, for these have direct affects on the Tariff. The basis
of our recent revision is the present Indian Motor Tariff suitably
rated downwards. It may be worth mentioning here that our revised
rates are still much lower than the present Indian Motor Tariff.
As per our statistics, the total Third Party claim paid during
the last three years is Nu. 13.025 Millions while the Nett Third
Party premium after deduction of management expenses is Nu.
8.96 Millions only. These figures clearly indicate that there
had been a loss in the Third Party Insurance portfolio of 125.25
% and as the goal of every organization is to achieve total
self-sustainability without having to compromise with our services
to our valuable clients, this revision was a must to strike
a balance between the above.
- Why are the options to
insure or not to insure, not left to the vehicle owners?
The Motor Comprehensive Insurance Cover was and is not at all
compulsory. The discretion whether to insure or not, totally
lies with the vehicle owner. Likewise, the discretion of accepting
any new Comprehensive Insurance proposals too lies with insuring
companies, which are subjected to inspection and fulfillment
the general underwriting requirements.
- Why is it very difficult
in settling a Third Party Claim?
The settlement of any Third Party Claim totally depends on the
establishment of its admissibility through the answers of the
following two questions;
a) Is the Insured legally liable to the Third party? and
b) Is the Insurer liable to indemnify the loss under the Policy?
Now, in order to answer the first question, the decision must
be reached by any court of law with respect to the Law of Negligence.
Therefore, the court’s verdict must be obtained and submitted
by the Claimants or the Insured to us.
Then follows the decision to second question, which is reached
with reference to the terms, conditions and limitations of the
Policy as well as the provisions of the RSTA Act of Bhutan.
Hence, we require various supporting documents and certifications
to authenticate the admissibility of the claim.
Incase the Insured is able to submit all the required documents
well in time, then, it does not take much time for the corporate
to settle the claim. At the same time, if the claimant or the
Insured takes time to submit the required documents, then naturally
the settlement of the claims are also bound to be delayed to
that extent too.
These documents required are a must to justify the payments
made under the claims as RICB is also answerable to our Internal
Audit, the supervisory bodies such as the Royal Audit, the Board
appointed Statutory Auditors and finally the Royal Monetary
Authority of Bhutan.
- Why RICB cannot be compared
with other corporations such as Bhutan Telecom?
The comparison of RICBL with corporation such as Bhutan Telecom
should not and do not arise as these two institutions are of
entirely different entities. It may be wise to note here that
the RICBL had been striving along alone after taking over of
the insurance business needs in Bhutan from the Oriental Insurance
Company of India for the last 26 years without any subsidy from
the RGoB as its never there. Further, the RICBL as an institution
has to pay tax to the government for generation revenue of our
nation for developmental activities and finally produce a fair
balance sheet to our shareholders by virtue of being a public
company at the end of the day.
- Why are the minor claims
not worth claiming?
The minor claims are not worth claiming as the requirement of
support documents and the time taken in assessment and processing
of these minor claims involves time and labor of same magnitude
as that of major claims, which may not be worth the initiatives
to be undertaken. However, this financial impact involved when
not claimed are definitely taken into account and considered
and compensated to the clients by way of offering ‘No Claim
Discount’ (NCB) on the own damage premium up to 60 % for private
cars by us. This NCB has validity up to 90 days in case of failure
to renew in time and is also transferable in case of the vehicle
being sold with validity up to 3 years upon written intimation
to us in the effect.
-
Is insurance a money making
scheme?
No, insurance is definitely not a money making scheme. For the
information of our valued clients the total Third Party claim
paid during the last three years is Nu. 13.025 Millions while
the Nett Third Party premium after deduction of management expenses
is Nu. 8.96 Millions only. These figures clearly indicate that
there had been a loss in the Third Party Insurance portfolio
of 125.25 % as per our statistics, which clearly indicates that
the claims are definitely being paid. At the same time, the
role of RICBL is also not to be misunderstood as that of a charity
institution who is to take care of each and every liability
arisen due to the motor accidents unless the premium for the
policy is paid for by those involved.
Last but not the least, it is sincerely hoped that all the queries
are adequately answered and clarified and it is now to request
all the vehicle owners in Bhutan to kindly understand and note
that the stake of sustainability and affordability from both
the angles of the Insured and the Insurer had been duly considered
while revising the Third Party Liability Insurance Premium.
We earnestly thank all the vehicle owners in Bhutan for their
continued support favored to us in the past and pray for the
same in the future too, for without You there is no Insurance
and without Insurance there is no RICBL.
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Is it compulsory to insure the value of extra fittings? No, it's up to the insurer whether they want to insure it or not.
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Are we benefited if we insure the extra fittings? Yes of course if it's included and insured.
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What kind of benefits do we have if we go for comprehensive insurance? All risk covered and no claim on discount which can be transfered later on newly purchased vehicle.
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Why the procedure is lenthy when it comes to claims? Documentation is necessary in all claims to avoid audit objection. The procedure is simple if understood and followed accordingly.
- Giving opporturnity to both the Royal Bhutan police (RBP) and RICBL inspection team to inspect the accidental vehicle on the spot.
- Towing of vehicle to workshop.
- Preparation of repair estimate and submission of the same to the claim department.
- The RICBL field officer has certain limit to decide on the immediate repair, else the matter has to be transferred to an independent surveyor to access tha loss.
- Negotiation, re-inspection, quotation are to be followed prior to repair, availability of spare parts etc
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What are the benefits of millennium education scheme?
Survival benefit will be paid@20% of the SA from the Vesting age at 18 and annually up to 22 years.
The maturity value of the policy will be paid at age of 23 years of the child for the number of years premium paid and calculated as per the valuations of the actuary.
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What do you mean by free insurance cover?
The concept of free insurance cover is not applicable in Millennium Education scheme.
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Can both the parents be Proposer in the same policy?
No, both the parents cannot be the Proposer for one policy.
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What if the Proposer dies in between?
If the Proposer dies, the policy will still continue till the end and the premium waiver and additional benefit that the assured gets is the annuity in the form of Education Allowance of 1% of the SA after the commencement of the risk till the vesting period.
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Who else can be the nominee?
Nominee can be the Blood related or the legal heirs.
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Why the age proof is necessary?
Age proof is necessary basically to determine the premium of the product which will be offered for sale and to be bought.
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How the bonus is being calculated?
The bonus will be valuated every year as per the profitability of the company by the Actuaries by taking into considerations the liabilities and assets of the company and the reserve of the life fund.
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Will it be fine if we cancel the policy in between?
The cancellation of the policy has to come through the Proposer or the assured after He/She attains the age of majority and will be dealt as per the terms and conditions of the policy. The minimum period that the policy has to be in full force is three years and only the surrender can be affected but, the party will be at loss and simultaneously the insurer, since in the early years the expenses are quite high on the part of the policy.
- What would be the consequence if the child dies in the middle of the insurance period?
Death of the assured before commencement of the risk will result in refund of premiums without any interest and after the commencement of the risk Sum Assured plus the accumulated bonus for the number of premiums paid will be paid.
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