The owners and operators of ZRs and minibuses are complaining that the cost of insuring their vehicles is threatening to drive them out of business.
The representative bodies of the two sectors of transportation said it was unfair that they were being forced to pay between $12,000 and $22,000 a year to insure vehicles, many of which were over five-years-old.
“The cheapest insurance you can get in Barbados for PSVs [public service vehicles] is $12,000 or it can go as much as $18,000 for a ZR, and $16,000 for a minibus up to $22,000 a year and we are saying definitely that is too high. It is driving us out of business and it is not what we would like,” Chairman of the Alliance for Owners of Public Transport Inc (AOPT) Roy Raphael told Barbados TODAY.
Raphael explained that the majority of the public transportation fleets were aging, with between 50 per cent and 70 per cent of the vehicles over five-years-old, therefore the insurance costs ought not be as high as they are.
He said something had to give, and if the insurance companies were not prepared to lower the rates, the transportation industry would have to consider its options.
One probability, he said, was to turn to an insurance company abroad, for which permission would be required from the
local regulator, the Financial Services Commission (FSC).
A check with the FSC revealed that under the Insurance Act, those desirous of obtaining insurance from a non-Barbadian registered insurer may seek permission from the Supervisor of Insurance, who will investigate the matter to ensure it is “not possible to obtain similar protection at a comparable cost” from an insurer registered here.
“The time may have to come shortly when we have to discuss going outside of Barbados to seek insurance coverage for our PSVs. But at this stage it is definitely too high and we will want to speak to the Financial Services Commission to see if we can get permission from them through a broker to see if we can have other persons outside of Barbados write our policy,” Raphael said.
The Association of Public Transport Operators (APTO) has recommended a second option – that of forming their own insurance company, wholly owned by all the stakeholders.
APTO Chairman Maurice Lee told Barbados TODAY he raised the issue of the high rates about two years ago and it was about time it was put back on the table, since PSV owners were finding it increasingly difficult to insure their vehicles.
Lee said he had already recommended to both members and non-members of the grouping that they should seriously consider a form of self insurance, therefore bypassing the established insurance companies.
“We as operators should not be going around cap in hand to insurance companies concerning insurance,” Lee emphasized.
The APTO head was confident there were enough players within the PSV industry to sustain such a venture.
“When you consider the buses, the ZRs and other taxis that would want to come on board, not just owners but along with the workers and the properties and private vehicles that they have, the multiplying effect of that is tremendous and therefore every effort should be made, or no effort should be spared to get something like that off the ground.
“That is where the industry needs to focus on as opposed to uniforms and bus stops and stuff like that,” Lee advised.
The issue of high insurance rates emerged two years ago when Raphael complained that the owners were charging up to $15,000 for third party insurance for ZR vans and up to $24,000 for similar coverage for minibuses. Added to that cost, he said back then, was the fee for a permit to operate.
“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,” Raphael said at the time.
The General Insurance Association of Barbados explained at the time that insuring PSVs was high risk and the insurance companies had to protect themselves.
A new issue cropped up last year when Massy United Insurance decided it would only insure owner-operated PSVs.
The owners and operators were livid and made their position clear to Minister of Transport Michael Lashley during a public transport discussion last September.
“I lost my insurance at Massy because they have taken the stance to not insure PSVs unless it is owner-driven. I had four vans on the road and since I can only drive one, three had to come off [the road],” Ian Walcott, a PSV owner of ten years, told the minister.
However, Director of Business Development and Marketing at Massy United Insurance Micky Armstrong told Barbados TODAY at the time, the decision had been made based on the high number of claims in recent years with respect to PSVs.`
Raphael revisited the vexing issue today, telling Barbados TODAY the association was hoping the insurance company would reconsider its decision.
There has been no new position from Massy United Insurance on the matter.