Delhi Lieutenant Governor (LG) VK Saxena has written a letter to Union Finance Minister Nirmala Sitharaman asking for car insurance premiums to be aligned with the number of owner violations committed by car owners. Saxena also cited similar practices in countries like the US and Europe, aimed at curbing traffic violations and enhancing road safety in India. He emphasised that such measures would act as deterrents, encourage safer driving, reduce accidents and improve insurance coverage.
"Resptd Smt Nirmala Ji I am writing to your kind attention to a matter of critical importance concerning road safety and vehicular insurance in India. I would like to suggest for your consideration that insurance premium should be index linked with the number of traffic violations recorded against a vehicle, which would have a salutary impact on road safety and traffic discipline," Saxena wrote in the letter.
LG proposes to increase insurance premiums for frequent violators
Delhi LG VK Saxena has proposed to link motor insurance premiums to traffic violation records. In a letter to Finance Minister Nirmala Sitharaman, he stressed that motorists who have committed more traffic offenses should pay higher fines to promote better road discipline.
India's high accident rate calls for stronger measures
Saxena highlighted alarming figures from the Ministry of Road Transport and Highways, noting that there will be more than 4.37 million accidents in India by 2022. About 70% of them are caused by speeding half He cited the statistic that vehicles with repeated traffic violations have a 40% higher risk of fatal accidents.
Trends in traffic violations in Delhi reflect national concerns
Referring to a 2023 traffic police report in Delhi, Saxena pointed out that 60% of fatal accidents involve vehicles with pre-existing traffic violations, mostly for excessive speed and red light jumping, and advocated a tiered insurance premium system based on the severity and frequency of such violations.
"According to a 2023 report of the Delhi Traffic Police, 60 per cent of fatal road accidents involved vehicles that had previously been fined for traffic violations, primarily over-speeding and red-light jumping. Vehicles with more than three traffic challans in a given year were found to have a disproportionately high involvement in severe accidents," he said in the letter.
"There is an obvious correlation between repeat traffic offences and the risk of accidents. I would therefore suggest that a layered insurance premium system based on the frequency and severity of traffic violations as recorded in MoRTH'S VAHAN database may be introduced. A vehicle that has been frequently challenged for offences such as over-speeding, red light jumping and dangerous driving should be obligated to pay the higher insurance premium," he added.
Global trends as a model for India
LG cited similar practices in the United States and European countries, where insurance premiums increase by 20-30% following traffic violations. Saxena noted discussions with the Insurance Regulatory and Development Authority of India (IRDA) to formulate a common framework for the implementation of the scheme in India.
"This financial deterrent would encourage better driving behaviour. Such measures have been successfully implemented in other countries such as United States, where insurance premiums increase significantly based on traffic violation and speeding tickets leading to an average premium increase of 20 to 30 per cent. This also followed in several European Nations," Saxena wrote in the letter.
Economic barriers to promote road safety
Saxena concluded that the measure would align insurance costs with driving risks, reduce the financial burden on insurers and encourage responsible driving, adding that he expressed optimism that the proposal would result in fewer accidents and better management of insurance premiums.
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