Frequent traffic violations will result in higher motor insurance premiums, regulators draft new rules

 

 Attempts to curb accidents: Frequent traffic violations will result in higher motor insurance premiums, regulators draft new rules

• A 6-member working committee recommended imposing a premium for violating traffic rules
• Points will be awarded on the basis of currency, from which the premium will be calculated

If you frequently violate traffic rules, the burden on your pocket will increase. Violators of traffic rules may have to pay higher motor insurance premiums in the near future. A working committee constituted by the Insurance Regulatory and Development Authority (IRDAI) has recommended imposition of a premium for violation of traffic rules. If these recommendations are accepted, people who violate traffic rules in the future will have to pay higher premiums for vehicle insurance.

There are currently four types of premiums in motor insurance

The working committee has recommended that motor insurance also include a premium for violating traffic rules. The working committee has recommended adding a fifth section to motor insurance for it. At present motor insurance premiums include on damage insurance, third party insurance, additional third party insurance and compulsory personal accident premium.

Insurance companies will be informed of traffic rules by NIC

According to the recommendations of the working committee, the premium for violating traffic rules will be determined on the basis of various violations ranging from driving under the influence of alcohol to parking in the wrong place. Insurance companies will receive currency information from the National Informatics Center (NIC) regarding traffic violations.

100 point penalty for driving under the influence of alcohol

According to the recommendations, driving under the influence of alcohol will result in a 100-point penalty, while parking in the wrong place will result in a 10-point penalty. The amount of premium for violation of traffic rules will be linked to this penalty point. If you sell a vehicle the premium for violating traffic rules for the buyer will start from zero.

IRDAI sought suggestions from the concerned parties

Insurance regulator IRDAI has issued a draft on the recommendations of the working committee. IRDAI has sought suggestions from all concerned parties on this draft by February 1, 2021. The draft calls for the creation of a system to calculate the frequency and severity of traffic violations. It asks to link traffic rule violations with traffic rule violation premiums.

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A total of 9 members are involved in the working committee

According to the draft issued by IRDAI, the working committee has a total of 9 members. It includes officials from Delhi Traffic Police, Insurance Company, IRDAI and Insurance Information Bureau (IIB). Anurag Rastogi, Chief Actual and Chief Underwriting Officer, HDFC Argo General Insurance Company Limited, was the Chairman of the Working Committee.