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The Indian Railways offers probably the world’s cheapest travel insurance plan — at just 35 paise per passenger — providing a cover of up to Rs 10 lakh. Despite this, less than half of the passengers choose to avail it, officials say.
The recent Odisha train tragedy, which claimed nearly 300 lives, brought into focus the lack of awareness among passengers about the ultra-low-cost insurance.
Data accessed by Business Standard from sources in the railways and insurance companies indicates that only 680 of the 2,296 ‘reserved’ passengers in the two passenger trains involved in the deadly accident, or just about 30 per cent, had opted for the insurance. Moreover, the insurers have so far received claim requests from only 4-5 per cent of the total passengers insured.
It was on June 2 that Train no. 12841 Coromandel Superfast Express and Train no. 12864 Bengaluru-Howrah Superfast Express met with the tragic accident, killing 294 people and injuring over 1,175. According to a railway source, only 346 passengers in Coromandel Express and 334 in Howrah Express had insured themselves at the time of booking their tickets.
The two insurers, SBI General Insurance and Liberty General Insurance, are still in the process of assessing the claims. However, the SBI General Insurance data shows that of the 351 passengers insured by the company, only 15 claims, totaling Rs 48.27 lakh, were reported till July 10. Five of these claims were for disablement, and the rest for medical expenses.
“We have received a few claims. SBI General’s team has put in place a standard operating procedure and formed a task force to handle queries and claims on a priority basis. It keeps an eye on the inbound data and is well-prepared to help customers. To avoid any delays in the claim settlement procedure, the company has adopted a simplified claim process with minimal necessary documentation,” an official of the insurance firm told Business Standard.
As part of the insurance policy, a cover of up to Rs 10 lakh is provided in case of death, permanent total disability, or hospitalisation due to an accident during the journey.
Liberty did not reveal the details on the number of people who sent claim requests. “We are committed to providing industry-leading claims service to all our policyholders, especially to our customers who have been impacted by this very tragic accident,” said Roopam Asthana, chief executive officer and whole-time director, Liberty General Insurance.
At present, IRCTC, a subsidiary of the Indian Railways, provides travel insurance on e-tickets as an optional service, which the traveller must select at the time of booking. Interestingly, about 80 per cent of the reserved rail tickets were booked online in 2021-22.
Industry experts stress the need for more awareness among passengers, as there are not enough takers for the insurance despite being one of the cheapest in the world.
“The effort of submitting a claim is often too much compared to the claim amount,” said Srinath Mukherji, director and co-founder of Sana Insurance Brokers. “Besides, the railway travel insurance through IRCTC covers only accidents, which are not perceived to be frequent,” Mukherjee added.
