Thukten Zangpo

Despite mandatory vehicle insurance requirements, almost half of the vehicles in the country are uninsured, which comes to about 40,100 vehicles as of December last year.

In the past five years, accidents claimed 588 lives and injured 2,946 people.

It comes to about 46 percent, given 125,535 vehicles registered with the Bhutan Construction and Transport Authority (BCTA) with 86,105 qualifying as insurable and 31,384 old and unusable vehicles as of December last year. Only 46,005 vehicles are insured with two insurance companies–Bhutan Insurance Limited and Royal Insurance Corporation of Bhutan  (RICB) as of last year.

An official from the BCTA said that vehicle insurance, at least for third parties, is mandatory, and comprehensive insurance for commercial vehicles like taxis and buses.

According to the Road Safety and Transport Authority regulations (RSTA) 2021 Section 429, commercial vehicles should have a comprehensive insurance policy and other vehicles should at least have a third-party insurance policy.

Motor insurance is mandatory because it helps protect vehicle owners from financial losses and third-party liability.

The minimum premium for the third-party ranges from Nu 1,100 to Nu 2,550 annually and higher for the comprehensive insurance depending on the cost of vehicles and type of vehicles.

The benefits of a third-party insurance policy vary from Nu 10,000 to Nu 30,000–Nu 10,000 for injury, Nu 20,000 for death of a person, and Nu 30,000 for permanent disability. Moreover, third-party insurance gives compensation of up to Nu 500,000 for third-party property damage depending upon the severity of the case.

According to Section 50(2) of the RSTA Act, driving a motor vehicle without insurance is an offence and is punishable by fines.

As per Section 5 of the commercial passenger vehicle regulations, the penalty for a commercial passenger vehicle regulation, the penalty for a commercial vehicle with no insurance certificate is 25 units (Nu 1,250). The penalty for light vehicles is five units (Nu 250) and two units (Nu 100) for two-wheelers. One unit of fine is Nu 50.

This translates to Nu 10 million annually lost in government coffers on fines for no insurance certificates considering 40,100 uninsured light vehicles.

An official from RICB said that there is still a refusal for vehicle insurance policy from car owners despite adequate advocacy. “There is no proper system of insurance in place in the country and it is considered a bad omen as well there is no serious approach from the concerned authorities. The BCTA and traffic police should make it compulsory.”

He said that Bhutan can follow India’s suit of availing mandatory vehicle insurance.

An official from BCTA said that the Authority with the help of traffic police is checking the insurance certificate and imposing penalties if not renewed.

A car owner, Sonam, said that there was no vehicle insurance when he bought a second-hand car a few months ago and it did not strike him to insure it later on.

Another car owner said that he had comprehensive insurance for a year but later switched to third-party cover. He did not renew it for a year now. He said that he did not see any difference in whether the vehicle was insured or not.