New Delhi: Traffic violations may increase your motor insurance premium

The Insurance Regulatory and Development Authority (IRDA) has prepared draft guidelines for linking the motor insurance with traffic rule violations to determine the premium. The IRDA published the report of the working committee which was appointed to conduct a study in  this regard, for collecting public opinion.

The group has recommended inserting a fifth section to motor insurance called “Traffic Violation Premium” in addition to motor own damage insurance, basic third party insurance, additional third party insurance and compulsory personal accident premium.

“This section will float over both Own Damage and Third Party sections of Motor insurance and can be attached to any section of motor insurance cover being purchased, chiefly, Own Damage or Third-Party insurance,” said the exposure draft issued by Insurance Regulatory and Development Authority of India.

So people living in not just Delhi-NCR, but also in Uttar Pradesh and Haryana need to be careful while driving otherwise their insurance premium will increase. The new changes will be first implemented in Delhi on a trial basis. Even if people from other states violate traffic rules in Delhi, it will be included in the insurance premium.

 IRDA has asked necessary suggestion from the concerned parties regarding the draft by February 1, 2021.

 In practice, every motor insurance buyer will be assessed for traffic violation points based on which the premium will be fixed.

 In September 2019, the IRDAI constituted the Working Group to examine the establishment of a system of Linking Motor Insurance Premium with Traffic Violations.