THE IRDAI GROUP PROPOSES THE IMPLEMENTATION OF A PREMIUM FOR TRAFFIC VIOLATIONS.

TRAFFIC VIOLATION PREMIUM IMPLEMENTATION PROPOSES BY THE IRDAI GROUP

Introduction-Traffic Violation Premium

In addition to own injury, third party, as well as other forms of motor insurance premiums, a working group formed by regulator IRDAI. This Working group  proposes the introduction of a ‘Traffic Violation Premium.’

Motor insurance includes the own injury policy, third-party coverage, extra third-party insurance, and compulsory personal accident premium. The “Traffic Violation Premium ” is the fifth portion add to motor insurance declares in the reports.

IRDAI

According to the liability drafts released by the IRDAI, this section may float over both the Own Damage and Third Party sections of motor insurance.

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It can add to any section of motor insurance cover being bought, mostly Own Damage or Third Party insurance (IRDAI).

IRDAI has extended the time for all stakeholders to make submissions on the proposals until February 1, 2021.

The report suggests a system for calculating traffic violation points based on the frequency and severity of various traffic infractions. The report of the steering committee on “Linkage of Insurance Premium With Traffic Violation,” has suggested the new measurements.

The amount of traffic violation premium will determine by driving habits.

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These habits will measure by the amount and types of orders.

The licensed owner of the vehicle, whether an individual or an agency, is liable to pay the traffic violation premium.  This effectively ensures that the owner will accept total accountability for any traffic violations committed by the authorized vehicle driver.

 The working group’s table of violations, suggests that firstly the driving drunk will result in a 100-point penalty.

secondly, false parking will result in a 10-point penalty.

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These penalty points would use to assess the premium amount.

Any vehicle insurance buyer will assess for his or her traffic violation points.

The traffic violation premium he or she must pay when engaging any general insurer for any sort of motor insurance, either Own Damage, Third Party, or Bundle, according to the report.

Traffic Violation Premium

And according to the paper, traffic violation premiums would be decided by the wealth of the car instead of the driver.

Therefore, if you are mainly buying a new car, there will be a clear record of traffic violations.

Secondly, car owners do not have to pay traffic violation fines when buying car insurance. 

lastly, if they have committed traffic violations before, whether they are drivers of other vehicles or their own vehicles. Similar or different types, depending on requirements.

This can also seem unfair,  however, it becomes consulted and held this way just for sake of convenience.

Also, this will remain so until motor insurance in India is based on vehicle criteria instead of who drives the vehicle.

However, it clarifies that when his or her insurance renew, he or she will be billed a traffic violation premium.

If a vehicle’s coverage is transferred after it is sold.

the traffic violation premium will start at zero from the date of transfer of ownership.

Also, increase depending on the number of traffic violations the vehicle causes after it is auctioned.

Insurance


Traffic violation premiums will be levy only on the policy date after any motor compensation has been paid. if a policyholder approaches an insurer to purchase additional cover during the term of a policy in which traffic violation premium has been charged.

The policyholder would only be obligate to pay the premium if it has not yet been paid with existing cover.

Traffic violation premium is payable ‘As On Date’ and does not vary with the period of insurance cover, the report said.

As a result, if the vehicle types and violation history of long-term insurance and an annual insurance purchaser are identical, then traffic violation premium should be the same.

According to the report, the National Capital Territory (NCT) of Delhi‘s High Powered Committee for Traffic Management has proposed that it be enforced on a trial basis in the NCT of Delhi.

Regardless of the fact that the Pilot will only enforce in the NCT of Delhi, vehicles from several other states. They lead to traffic violations in the NCT of Delhi will expect to pay a traffic violation premium. 

while safeguarding their vehicle in their home district, at any time after triggering traffic violations in the NCT of Delhi, the report stated.

Delhi Traffic Police

The NCT of Delhi‘s Traffic Police and the National Informatics Centre has been gathering vehicle traffic violation data for some time.

IIB will start planning straight away to take this data and integrate it with its database of auto insurance records. When the Pilot is introducing, IIB and insurers will already have a reasonable history of traffic violation data. 

It enabling them to immediately charge traffic violation premiums.

But per the Ministry of Road Transport’s 2018 Road Accidents Report, India witnessed 4.67 lakh road accidents in 2018, killing 1.51 lakh people.

the majority of whom have been in their working years.

India dominates the 199 countries in terms of road accident deaths, led by China and the United States, as per the World Road Statistics, 2018.

Motor Vehicles Act

In the updated Motor Vehicles Act 2019, the government has already implemented strict punishments for different forms of traffic violations. Besides that, the Government of India is concentrating on Intelligent Traffic Management Systems in metropolitan and smart cities.

The IRDAI established a Working Group in September 2019.   

This group is to investigate the possibility of establishing a scheme that links motor insurance premiums to traffic infractions.

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