A working group of the Insurance Regulatory and Development Authority of India (IRDAI) has suggested introducing the "Traffic Violation Premium" clause to own damage, basic/additional third party, and other types of motor insurance premium for those who violate traffic rules. IRDAI has welcomed the inputs of all stakeholders on the recommendations till 1st February 2021.
The working committee has suggested a system of calculating traffic violation points based on the number of incidence & severity of the traffic rules violation. The amount of traffic violation premium will depend upon these traffic offenses points. Different types of traffic infractions will carry different points. For example, the violation points for drink-&-drive will be the highest at 100 points, while the wrong parking will hold 10 points penalty. Hence, the driving attitudes of a vehicle owner will determine the "Traffic Violation Premium".
It is important to note that this premium will be paid by the registered owner of the vehicle (whether an individual or a company), which clearly means that the vehicle owner will be responsible for the traffic violations premium, even if someone else is driving the vehicle.
In case of transfer of insurance of a vehicle after-sale/ownership change, the traffic violation premium would start from zero from the date of vehicle ownership transfer.
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The traffic violation premium will be required to pay only on the policy anniversary or on the due date, and it will not vary with the period of insurance cover. The traffic challan data, stored on the National Informatics Centre (NIC) will assist the Insurance Information Bureau of India (IIB) to calculate the traffic violation points. These data will be shared with the IIB on daily basis.
According to the reports, the High-Powered committee for Traffic Management in the National Capital Territory (NCT) of Delhi has recommended this system to be run on a pilot basis in NCT. The NCT traffic police have already started collecting traffic violation data from NIC.
