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Wednesday, February 24, 2021

Irdai committee proposes traffic violation premium

According to Ministry of Road Transport, Road Accidents Report issued in 2018, India witnessed 4.67 lakh road accidents that killed 1.51 lakh citizens.

Written by George Mathew | Mumbai |
January 21, 2021 3:02:15 am
India ranks first in the number of road accident deaths across the 199 countries reported in the World Road Statistics, 2018 followed by China and US.

Vehicle owners may soon have to pay insurance premium depending on the traffic violations involving the vehicle. While a committee set up by the Insurance Regulatory and Development Authority of India (Irdai) has proposed that a “traffic violation premium” should be added to the vehicle insurance policy, the High-Powered committee for Traffic Management in the National Capital Territory (NCT) of Delhi has recommended this proposal to be run on a pilot basis in the NCT.

While the pilot has been discussed only for NCT, it may be run in any state with the consent of that State Governments and State Police department if the state has adequate system of capturing and transmitting traffic violation data of vehicles, it said. All general insurers registered in the country will have to make changes in their IT systems to mandatorily collect and account for this premium as a separate and additional fifth section. The working group on linking traffic violations to insurance premium has recommended inserting a fifth section to motor insurance called “traffic violation premium” in addition to motor own damage insurance, basic third-party insurance, additional third party insurance and compulsory personal accident premium. This section will float over both Own Damage (OD) and Third Party (TP) sections of motor insurance and can be attached to any section of motor insurance, it said.

This will ensure, regardless of any insurance cover a motor owner wants to buy, the person will be subjected to traffic violation premium, unless he already has in force a motor insurance policy wherein traffic violation premium has already been paid. This means if the vehicle is involved in traffic violations, premium will rise.

According to Ministry of Road Transport, Road Accidents Report issued in 2018, India witnessed 4.67 lakh road accidents that killed 1.51 lakh citizens. India ranks first in the number of road accident deaths across the 199 countries reported in the World Road Statistics, 2018 followed by China and US.

The report has recommended a system of calculating traffic violation points basis frequency and severity of different traffic offences. Insurance Information Bureau of India (IIB) will coordinate with various States’ Traffic Police and National Informatics Centre to capture the traffic violation data, calculate violation points of each violating vehicle and make this information available to all general insurers through IT system integration with insurers.

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