HIGH INSURANCE RATES are driving public service vehicle (PSV) owners “slowly but surely” out of business.
That claim was made yesterday by interim chairman of the Alliance of Owners of Public Service Vehicles, Roy Raphael. He described as ridiculous the $15 000 being charged by some insurance companies for third party insurance.
Unless the matter was urgently addressed, he said, the high rates could lead to ZRs and minibuses operating without insurance coverage, a situation he described as dangerous.
Raphael, who owns several PSVs, said that along with the high rates being charged, new people interested in owning vehicles were being turned back by insurance companies.
“Some PSV owners of ZRs are being charged as much as $15 000 for third party insurance, and minibuses can pay as much as $24 000, he told the DAILY NATION.
“That is a lot of money to be paying every year for insurance. And then when you consider that you have to pay $8 500 for a permit to operate, you can see how this would drive owners out of business.
“Before you even get your vehicle on the road you have spent around $25 000 . . . and that doesn’t even include the money used to purchase your vehicle.”
But Anton Lovell, a spokesman for the industry, countered that insurance companies undertook a very high risk by insuring PSVs.
He said the $15 000 Rafael considered too much for insurance was a small fraction of the price insurance companies had to fork out in the occurrence of an accident.
“The average claim by a passenger is between $25 000 to $30 000, and ZR vans can carry 15 passengers and minibuses can carry up to 32 persons, so that $15 000 which owners and operators complain about is nothing,” said Lovell, the chairman of the public relations committee of the General Insurance Association of Barbados (GIAB).
“Insuring PSV vehicles is high risk and insurance companies have to protect themselves. PSV operators can’t expect to pay the same as a private car.”
Lovell said that risk was increased due to reckless and dangerous driving by some PSV operators.
“The problem is that the drivers and operators don’t understand the significance of that because of how they are operating.
“Some operate the buses as though they are transporting bags of potatoes or onions, and not people’s lives,” the general manager of Co-operators General Insurance said.
However, Raphael insisted passengers could also find themselves in potentially dangerous situations if a compromise wasn’t reached.
“Some owners may not be able to pay those high costs and we may end up in a situation where PSV vehicles are operating on the roads with no insurance,”?he said. “And if those vehicles get into an accident, what is going to happen to those passengers who are on board and who get injured?”
