Pay More Car Insurance Premium for Violating Traffic Rules

Owning a motor vehicle is a dream come true for many people in India. For most, it is their primary mode of transportation. While driving is an exciting experience, it comes with its challenges and dangers. Ensuring the people driving and pedestrians are safe against unforeseen events, traffic authorities have imposed necessary regulations. The simplest of these rules is to stop at red lights, use motor vehicle indicators when making turns, carrying your motor insurance plan, etc.

Despite the traffic safety rules in place, it is baffling to see how people drive and respond to these basic rules. Also, there are always the chances of having inexperienced or rash drivers, causing havoc on the streets. All this makes driving on the Indian roads dangerous.

The safety of citizens cannot be risked by hoping that people will follow the traffic rules. Because of this, authorities have come up with a potential solution that involves your motor insurance plan.

How Does Car Insurance Connect with Following Traffic Rules?

Insurance Regulatory and Development Authority of India (IRDAI) is responsible for managing several insurance plans. To make Indian roads safer for everyone, IRDAI and traffic authorities are planning to connect motor insurance with traffic safety rules. More specifically, the way an individual follows traffic rules will impact their bike or car insurance premium rate.

Besides the influence of general factors, the ones used by the car insurance calculator to determine the cost of the policy, your car insurance premiums will soon be based on your discipline in following traffic safety rules. IRDA committee has proposed that the motor insurance premium rate should include an additional component for traffic violations when calculating the policy price.

As of now, this change in motor insurance premium rate is imposed in Delhi-NCR regions along with Uttar Pradesh and Haryana. The aim behind this idea is to add an economic angle to the traffic safety rules. Besides, it is simple – if you break traffic rules, you will be charged a higher premium.

How Does it Work?

This new proposal works on the collection of traffic data and its conversion into a point system. It is a collaboration between Insurance Information Bureau of India (IIB), National Informatics Centre, and the traffic police of the respective states (currently only those where the rule is imposed). The system collects the data of traffic violations and converts them into violation points. Each vehicle’s violation points are stored in the name of its owner. This data is then made available to all the general insurance providers in the state.

The data is primarily maintained by the IIB for all vehicles. However, the only traffic violations that will affect your policy are the ones made two years before the date that his proposal was introduced. The additional amount charged on your motor insurance premium is most likely to be separate from the usual fines charged by the local traffic police.

Each violation will come with a predetermined violation point. The sum of these points is converted to a monetary value. This monetary value is the sum that you have to pay over and above your existing bike or car insurance premium amount.

So, the next time you are about to break a traffic safety rule, be mindful! You certainly do not want to pay a hefty traffic violation penalty along with an expensive car or bike insurance premium.