Insurance Firms Likely To Take Rs 400 Crore Hit

General insurance companies are likely to take a hit of up to Rs 400 crore due to the cancellation of over 3,700 petrol pump allotments by Prime Minister Atal Bihari Vajpayee last Monday.

Petrol pump owners will therefore be able to cushion themselves against part of their losses through insurance claims.

While the four public sector general insurance companies are yet to firm up the extent of compensation to be paid to the owners of petrol pumps and LPG and kerosene distributorships, a top executive with one of them said the losses can touch Rs 400 crore, depending on the insured value.

Executives said typically the insurance premium is Rs 3 per mille (thousand) in the case of properties like petrol pumps. They, however, clarified in some cases pump owners had also taken a silent risk cover which entitled them to a compensation in case the insured property was lying idle for a while. However, there were no available estimates of the number of pump owners who had purchased such a cover. In addition, the stock lying at petrol pumps is also insured by insurance companies.

Insurers said traditionally a day