Money & Banking

Traffic violations could soon increase your motor insurance premiums

KR Srivats New Delhi | Updated on September 08, 2019 Published on September 08, 2019

IRDAI sets up working group to examine linking of motor insurance with traffic violations

You may soon have to pay more motor insurance premium if you violate traffic rules as Insurance regulator IRDAI has set up a nine member working group to examine a system of linking of motor insurance premiums with traffic violations.

The working group--which has to submit its report in two months-- is headed by Anurag Rastogi, chief actuary and chief underwriting officer, HDFC ERGO.

The terms of reference of the Working Group are

(a) To recommend implementation framework and methodology to link insurance premium with traffic violations.

(b) To study lnternational practices on the above subject and recommend best practices suitable to lndia.

(c) To evaluate the current point system for traffic violations implemented by states and evolve standard point system considering each traffic violations.

(d) To develop data fields required to implement traffic violations as rating factor in motor lnsurance.

(e) To suggest system of access to traffic violation history data of each vehicle and transfer of data from enforcement authorities to llBl database.

(f) To suggest modalities for carrying out an immediate pilot project at NCT of Delhi.

The IRDAI feels that linking insurance premium to traffic violations committed could reduce road accidents and change driver behaviour. Insurance companies have been tasked to run pilot projects in Delhi to implement the premium escalation formula, according to an order issued by IRDAI.

Read also: Can we change the way we drive?

Any such move of linking motor insurance premium with traffic violations will be a setback for bad drivers, who are recently faced with higher penalties for traffic violations. From September 1, traffic violations attract higher penalties as per the recent amendments to the Motor Vehicle Act.

Published on September 08, 2019

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