PSV ease

A spokeswoman for the insurance companies here said public service vehicle (PSV) owners no longer have an excuse to complain about insurance premiums.

Administrator of the General Insurance Association of Barbados (GIAB) Gina Welch has revealed that rates are as low as they have ever been in recent years.

“For the last couple of years premiums have been falling, so now is the best time to get motor insurance,” Welch told Barbados TODAY at the junction of Country Road and Roebuck Street, The City, where the GAIB this morning launched its sponsorship of the pedestrian crossing.

The insurance executive explained that while the 2016-2017 statistics for the insurance industry were still being tabulated, initial indicators supported her perspective.

Her claim was also backed by several insurances brokers contacted by Barbados TODAY, all of whom concurred that the average insurance premiums for ZRs had been capping off at $10,000 since last year.

This represents a significant decrease from 2015 when it was estimated that PSVs annual insurance costs ranged from $5,000 to $18,000 for ZRs and $11, 000 to $26,000 for minibuses, due to the high risk associated with the sector.

However, Welch warned that the rates could rise again if the number of mass casualty injury claims continue at the current pace.

In the wake, several accidents this year involving minibuses and ZRs, which resulted in serious injury to passengers, Welch said that owners who still complain about premiums were not factoring in the cost of insuring their customers.   

“Any complaints about insurance premiums are certainly not justified at this time but a lot of people only compare the cost of their premium to the value of their vehicle. They are not taking into consideration that their insurance covers the fact that they can cause a $30 million claim. The premium is based not just on the vehicle but also that third party injury element,” Welch said.

“The thing is that personal injury claims . . . unlike replacing or fixing the vehicle, you can’t just make a one-off payment. The process takes the same amount of time it takes the person to heal and the insurer is required to make incremental payments every step of the way. You can’t just look at the injured person and say they are going to be better in eight weeks so here is a payment,” she added.

Two years ago Massy United Insurance’s took the hardline decision not to renew the insurance of PSVs that were not driven by the owners due to the high number of claims.

Both the Alliance of Owners of Public Transport (AOPT) and the Association of Public Transport Operators (APTO) continuously voice concerns about the tough approach by the insurance companies to insuring PSVs, arguing that high premiums, coupled with the limited number of companies willing to insure the vehicles, made it difficult for them to make a decent living.

However, Welch said the premiums the owners pay were completely up to them, emphasizing that the owners needed to impress on PSV operators the need to be discreet and cautious on the road in order to reduce the number of accidents and, by extension, the number of claims.

“We cannot reduce premiums in an industry without looking at what the clients’ experience is. So at the moment the ball is in their court because as I said earlier, premiums have fallen significantly,” she stressed.

colvillemounsey@barbadostoday.bb

6 Responses to PSV ease

  1. Sue Donym November 2, 2017 at 1:28 am

    Of course there’s more to this.
    Insurance companies are sure to remind customers that although they might have little or no loss themselves, premiums can be expected to rise (or at least not fall) because of:
    – risk in the sector
    – region wide risk
    – cost of re-insurance which they have little control over

    The pricing is never a simple single formula as rates vary from company to company and may also factor in the company’s entire claims, loss and pending experience as well as the company’s desired profit. There is also the fact that the ‘cap’ is somewhat subjective and might not be a real reflection of the individual’s risk and claim history, as the no-claim discount itself has a cap which is usually smaller for commercial than for private cover.

    In fact, there is a good chance that rates in Barbados will rise very soon, based on loss experience in the Caribbean this hurricane season.

    Reply
  2. jrsmith November 2, 2017 at 6:14 am

    Bad attitude on the roads causes accidents and us all high premiums, I was on a yellow bus from speightown to Bridgetown and the driver was openly using his cell phone , this I couldn’t believe no one said anything , this went on for about 10 minutes he almost cause an accident at the lime centre…………………

    Reply
    • Sue Donym November 2, 2017 at 12:13 pm

      Can I take it that you @jrsmith were one of those who said nothing? Can’t hope to change it, then.

      Reply
  3. MArk Anthony
    MArk Anthony November 2, 2017 at 7:28 am

    The PSV owners should form their own insurance company .

    Reply
  4. Milli Watt November 2, 2017 at 10:49 am

    imagine that premiums falling and these good for nothing musty smelling and looking parasites want an increase in rates sstttuupppssee

    Reply
    • Sue Donym November 2, 2017 at 12:17 pm

      Imagine now @Milli Watt, that insurance is not the only expense to a PSV, but that the cost of fuel, oils, tyres, parts are all continuing to rise. Imagine for a moment that there has not been a fare increase in over 5 years.

      Reply

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