India may link drivers' traffic violations with motor premiums

Move aims to influence drivers in becoming more mindful of behaviour on the road

India may link drivers' traffic violations with motor premiums

Insurance News

By Gabriel Olano

Traffic rule-breakers beware: India’s insurance regulator is considering linking drivers’ traffic violation history with the motor insurance premiums they pay.

This will likely mean that motorists who frequently run afoul of traffic laws will pay more compared to compliant drivers.

According to a report by Mint, on September 06, about a week after the Indian government implemented the new Motor Vehicles Act, the Insurance Regulatory and Development Authority of India (IRDAI) created a nine-member working committee to study the possibility of traffic violations influencing motor premiums.

IRDAI’s action is in response to the government’s suggestion to include traffic violation history as one of the parameters considered in calculating motor premiums, the report said. Currently, the vehicle’s make, model, and variant are the only factors used in determining premiums. Motor insurance in India is linked to the vehicle and not the driver.

The committee will have two months to study the proposal, make recommendations, and come up with a framework for implementation. Afterwards, the scheme will be piloted in Delhi before being rolled out to the rest of the country.

Meanwhile, insurers hailed the proposal, and suggested that a points system and a centrally available pool of data regarding drivers and their traffic violations should be put in place.

“We would then be able to segregate good drivers from regular violators,” Gurneesh Khurana, head of motor business at Bajaj Allianz General Insurance, was quoted as saying by Mint.

“It’s something like this: The day I start exercising, I also look at what I eat. Similarly, once people know what price they’ll have to pay for violating traffic rules, they’ll automatically become more careful.”

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