Traffic violations could soon make your car insurance costlier! What to know

Insurance regulator Insurance Regulatory and Development Authority (IRDA) has set up a nine-member committee to work a plan for linking insurance premiums to traffic violations.

By: | Updated: September 10, 2019 9:18 PM

car insurance, traffic violations

How many accidents you have and how many traffic violations you commit could soon have an adverse effect on your car insurance premium. A special committee is currently mulling whether traffic rule violations should be linked to vehicle insurance premiums which would allow insurance companies to decide the premium payable on your car. Insurance regulator Insurance Regulatory and Development Authority (IRDA) has set up a nine-member committee to work a plan for linking insurance premiums to traffic violations and submit a report in the next two months.

The committee was formed at the recommendation of a High Powered Committee for Traffic Management under the chairmanship of Union Home Secretary to examine linking of insurance premium with traffic violations.

Subsequently, in a meeting held under the chairmanship of Special Commissioner of Police: Traffic, Delhi on Integration of Insurance and Traffic Prosecution Data, it was decided that a Working Group will be formed to take the idea forward. Insurance companies would have to undertake a pilot project in NCT (near capital territory), Delhi to implement the premium escalation method.

The terms of reference of the Working Group are as under:

-To recommend an implementation framework and methodology to link insurance premium with traffic violations.

-To study International practices on the above subject and recommend best practices suitable to India.

-To evaluate the current point system for traffic violations implemented by States and evolve a standard point system considering each traffic violations.

-To develop data fields required to implement traffic violations as a rating factor in Motor Insurance.

Also read: Motorcyclist fined Rs 23,000 for traffic violations in Gurugram: Here’s why

-To suggest a system of access to traffic violation history data of each vehicle and transfer of data from enforcement authorities to IIBI database.

-To suggest modalities for carrying out an immediate pilot project at NCT of Delhi.

-To consider any other aspect relating to the subject.

The 2019 Motor Vehicle Amendment Bill recently passed in the Parliament has had road users scrambling to get their vehicle documents in order since the traffic violation fines have now been revised by up to 20 times. More details on the matter of vehicle insurance to traffic rule violations should be known in two months.

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