Violating Traffic Rules? You May Have to Pay Higher Motor Insurance Premium Soon | Details Here

New Delhi: Are you violating traffic rules while driving? Beware! You may end up paying more premiums soon as a working group committee appointed by the insurance regulator IRDAI has recommended introducing a new section in motor insurance premiums for reducing traffic violations. Also Read – IRDAI Withdraws Long-term Package Policy, Auto Makers May Benefit

As per latest updates, the working committee recently submitted its report on the prospect of linking motor insurance premiums with traffic violations. Also Read – IRDAI Extends Grace Period For Life Insurance Policies Till May 31

Submitting the draft proposal, the committee recommended inserting a new section to Motor Insurance called ‘Traffic Violation Premium’ or TVP in addition to the four sections — Own Damage insurance, the mandatory Basic Third-Party insurance, Additional Third-Party insurance and Compulsory Personal Accident Premium. Also Read – IRDAI Relaxes Burden on Policyholders For Renewal Payments Amid COVID-19 Lockdown

In the proposal, the IRDAI said that the 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 cover being purchased, chiefly, Own Damage (OD) or Third-Party (TP) insurance.

The nine-member committee appointed by the IRDAI said that the TVP will be linked to a system of penalty points accumulated by vehicles for each traffic violation over the past two years. The committee in the report said that the TVP will not apply to new vehicles, but will be applicable at the time of renewing insurance cover in case a vehicle has collected penalty points for traffic violations.

On the other hand, the Insurance Information Bureau of India (IIB) will coordinate with traffic police departments in various states and National Informatics Centre to keep a track of all traffic violation data, which will help them calculate points for traffic violations by vehicles.

And after that the collected information will be shared with all general insurance companies through an integrated system. In this regard, the IIB is expected to keep a detailed track of all traffic violation data, the violation points collected by a vehicle in the last two years from the date of insurance proposal will matter.

Notably, the vehicles which have collected higher penalty points for traffic violations in the past two years will be subjected to higher TVPs.

The draft report of the committee said that the TVP will have to be paid by the registered owner of the vehicle. It is simply because the owner will have to take full responsibility for the traffic violations caused by the authorised vehicle driver.

In case, an individual has transferred his/her vehicle along with insurance to another person, there will be no TVPs till the next assessment at the time of motor insurance renewal. If the vehicle has collected points for traffic violations after the ownership transfer, TVPs will be applicable in the next insurance cycle.