B Mirror Report: In 2025, the number of traffic accidents in Bangladesh was incredibly concerning. In 6,729 accidents during the course of the year, 9,111 people died and 14,812 were injured. A useful tool for giving accident victims financial protection, “third-party insurance,” sometimes known as motor insurance, has remained largely underutilized at a time when road safety has emerged as a top national concern. Even though “mobile liability insurance” was restored on a pilot basis by the Insurance Development and Regulatory Authority (IDRA) in August of last year, the number of policyholders during the last six months has been insignificant. According to experts, the primary obstacles are the expensive premiums and the fact that insurance is not required.
Under the new insurance policy, if a third party suffers death, injury, or property damage caused by an insured vehicle, the insurance company will provide financial compensation. In the event of death, compensation of up to Tk 200,000 is предусмотрено, while up to Tk 20,000 can be paid for serious injuries with the possibility of recovery. In addition, up to Tk 60,000 is allocated for property damage and up to Tk 10,000 for legal expenses. It is noteworthy that the mandatory requirement for third-party insurance was withdrawn in 2020 following the Road Transport Act of 2018, which caused stagnation in this sector.
Observations show that awareness of this insurance is extremely low among ordinary motorcyclists and car owners. Even those who are aware of it are not interested in purchasing it because it is not mandatory. According to general customers, where cautious driving is considered sufficient to avoid accidents, paying a large premium for insurance is seen as an additional and unnecessary expense. For example, the premium has been set at Tk 1,006 for a 150cc motorcycle and Tk 2,070 for a 1,300cc private car, which many consider to be high.
Insurance companies are also frustrated by the situation. Large institutions such as United Insurance report that although they collected tens of millions of taka in premiums during the first nine months of the year, their income from motor insurance was zero. Company officials say that without a legal obligation, no one comes forward voluntarily to purchase this insurance. Moreover, the process of obtaining compensation is highly complex and involves lengthy legal battles, making it unattractive to the general public.
IDRA authorities, however, have acknowledged that there is a crisis of public trust in the insurance sector. Although discussions are ongoing with the BRTA and transport owners’ associations, no consensus has yet been reached on making the insurance mandatory. Experts argue that considering the severity of road accidents, increasing compensation limits, digitizing the claims process, and making the insurance legally mandatory are now urgent needs. Otherwise, it will remain merely a policy on paper.
