Railway & Its Travel Insurance- 75 Percent Success Rate

Railway & Its Travel Insurance- 75 Percent Success Rate

As compared to life insurance and health insurance, there are limited buyers for travel insurance. As per a recent report by the Insurance Regulatory and Development Authority of India (IRDAI), in the fiscal year 2014-15, only 1.4 million domestic travel insurance plans were issued in India. Travel Insurance is often neglected by people! But its significance is only realized after mishaps like train accidents, flight accidents happen. But why do most people wait for something wrong to happen and then realize that they should have taken the travel insurance cover?

As discussed above, often people don’t buy travel cover. And the ones, who buy travel insurance, don’t buy adequate coverage. They cover themselves for matters pertaining to baggage loss and flight/train delays.


Insurance and Rail Travel

Whenever we get to know about train mishaps, we question the safety of the passengers. We instantly demand to improve the safety standards. But such mishaps also reflect the poor penetration of travel insurance in our country. Keeping that in mind, Indian Railway Catering and Tourism Corporation (IRCTC) in partnership with insurance companies has launched an (optional) insurance scheme.

About 555,000 train tickets booked per day through IRCTC’s website; as of now, approximately 75 percent i.e. 350,000 passengers are picking this option.

The insurance penetration depends on train routes. For example, the Indore- Patna Express that became a victim of a deadly mishap on November 20th, caused loss of more than 150 lives and more than 200 people were injured. At the time of this mishap, there were only 78 injured passengers who had insurance coverage. In addition to that, out of 140 passengers who lost their life during the mishap, only five of them opted for the optional insurance coverage.


Travel Insurance and its Scope

The (optional) travel insurance brings together a group of insurance policies that is given to the insurers on an individual basis. When you book your tickets, a premium worth 92 paise for each passenger is charged only if you go for travel insurance. By default, the amount remains constant regardless of the journey’s distance or travel category. If you opt for it, all passengers are covered under one PNR (passenger name record).

As per Sections 123, 124 and 124A, of the Railways Act, 1989, victims and accidents are categorized for the sole purpose of this scheme. A train accident could be the crash between trains, in which at least one train is a passenger train; the derailment of a train, other collision to a train or its part that is carrying passengers specifically.

The insurance issues coverage worth Rs. 10 Lakh in case of total permanent disability or demise. For partial permanent disability, the coverage is provided up to Rs. 7.5 lakh. Coverage up to Rs. 2 Lakh is provided for hospitalization. Coverage of Rs. 10,000 is provided for conveyance of the mortal remains of a victim. Hospitalization cover is an addition to the existing cover of disability and death.

In order to file a claim, one is required to file it within the duration of 4 months after the date of mishap. One has to submit a report on the accident issued by the railway authority, the list of deceased victims along with the documents. If the government provides any compensation to the victims of the train mishap, you can claim the insurance in that scenario as well. As per Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 1997, Rs. 4 lakh is provided as compensation in case of death. For permanent disabilities and injuries, compensation worth Rs. 4 lakh is provided.


Claims Process and Relaxation

When it comes to railway insurance claims, life insurance companies have made the process very easy and smooth. Insurers have provided relaxation in terms of claim norms. Generally, the beneficiary of the insured person has to present insured person’s death certificate issued by the concerned authority for the insurer to initiate the claim process. As per the policy duration and insured amount, the insurance company investigates things including non-disclosure possibility etc.

Three insurers including insurers providing (optional) rail travel insurance, two life insurance companies have made the processes of the settlement of the train accident victims’ claims easy and hassle-free. According to one of representative of leading insurance company, “the insurance company is working to figure out whether any of its insured perons were victims of recent train mishaps from their data”.

He was quoted as saying, “As of now, no such claims have been registered with us. Generally, nominees take approximately 60-70 days post incident to file the claims. At times, we start an investigation on our end in order to relax the filing process. In case a name is identified in the list of deceased passengers in the mishap, we consider it legitimate to file a claim.”

Insurance company offers railway travel insurance, at the time of Indore- Patna Express train mishap, received death and injury information on five cases. They were in the direct touch with the families. Technically, they approved the claims for death cases where confirmation of death was received from the concerned authorities. They waived off documents like postmortem report and made the process easier.

Out of reported 142 death cases, few cases were covered under the insurance. The next big thing that needs to be done is make sure that if not everybody, a maximum number of people buy this travel insurance. When the claims of such unfortunate incidents are settled, people get to believe in the prudence of such insurance coverage as they get a crystal clear understanding of such coverage.

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