Railways running without insurance cover

The railways paid Rs 140.74 crore during 2009-10 and Rs 182.40 crore during 2010-11 as compensation to victims of train accidents.

Last Updated: Aug 04, 2011, 19:30 PM IST

New Delhi: Despite a spate of fatal accidents and injuries to passengers in recent years, the railways have been running without an insurance cover since September 2008 as they discontinued the practice due to high premia.

Giving this information in the Lok Sabha on Thursday, Minister of State for Railways KH Muniyappa said the cover provided by the insurance companies was also inadequate and disbursements delayed.

"The premium quoted by the lowest bidder for 2008-09 was very high," said the minister but clarified that compensation to be paid to victims of train accidents were not affected because of lack of insurance.

The railways paid Rs 140.74 crore during 2009-10 and Rs 182.40 crore during 2010-11 as compensation to victims of train accidents.

"Loss or gain cannot be calculated without having insurance cover and comparing with the premium paid for the insurance cover," said Muniyappa.

During the years, when railways had insurance cover, it was not comprehensive and amount paid as compensation in case of accidents at level crossings, immediate ex-gratia relief, amount of interest awarded by the Railway Claims Tribunal or courts were not reimbursable.

The ministry also claimed that insurers did not make reimbursements in time and several disputes were created by the insurers while calculating premium

"Amount which was reimbursable to the Railways was withheld unilaterally," said Muniyappa.

IANS