More insurance premium for cars with more traffic fines? India may mull move
- Your insurance premium may become costlier if your vehicle is found to carry traffic penalties galore.
In a bid to ensure higher adherence to traffic rules in India, Delhi Lieutenant Governor VK Saxena has written to the Union Finance Minister Nirmala Sitharaman in which he urges her to consider linking insurance premium of vehicles to the number of traffic fines registered against each. In the letter Saxena highlights that such a measure is already in place in several states in the US and in many European countries.
India has some of the highest incidents of road accidents in the world and the number of casualties have spiked in recent times. Union Minister for Road Transport and Highways Nitin Gadkari himself has also highlighted the need to make Indian roads and vehicles safer. As such, linking vehicle insurance premiums with number of traffic penalties could act as a deterrent for those in the habit of breaking traffic rules.
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In his letter to the Finance Minister, Saxena highlights the need for safer roads in the country. “Resptd Smt Nirmala Ji I am writing to your kind attention to a matter of critical importance concerning road safety and vehicular insurance in India. I would like to suggest for your consideration that insurance premium should be index linked with the number of traffic violations recorded against a vehicle, which would have a salutary impact on road safety and traffic discipline."
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As per data from Ministry of Road Transport and Highways (MoRTH), there were 4.57 lakh road accidents in 2022 which caused 1.55 lakh deaths. Among the violations, over-speeding is the number one reason for accidents, followed by traffic signal violations. While factors such as better roads, safer vehicles and awareness around traffic rules are imperative, many agree that more stringent measures are needed. Linking insurance premium could be one such step. “In India, vehicle insurance falls under the purview of financial regulations, and as such, I seek your esteemed office's intervention to initiate discussions with the Insurance Regulatory and Development Authority of India (IRDAI) to create a framework to implement such a system," the letter from Saxena further reads. “Linking insurance premiums to traffic violations would not only align insurance costs with risk but also reduce the financial burden on insurers due to claims arising from frequent accidents."
(With inputs from ANI)
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