Delhi LG Proposes Insurance Premiums Tied to Traffic Violations

Delhi Lieutenant Governor VK Saxena has recommended to Union Finance Minister Nirmala Sitharaman that vehicle insurance premiums be linked to traffic violations. Saxena cites successful implementations in the U.S. and Europe to discourage traffic offenses and enhance road safety.

Delhi Lieutenant Governor VK Saxena has called upon Union Finance Minister Nirmala Sitharaman to link vehicle insurance premiums to the frequency of traffic violations committed by the drivers. Saxena believes that this measure would act as a deterrent to traffic violations and thereby improve road safety standards in India.

In his letter, Saxena pointed out the alarming statistics shared by the Ministry of Road Transport and Highways, which noted that India witnessed over 4.37 lakh road accidents in 2022, resulting in around 1.55 lakh fatalities. Saxena highlighted that more than 70 per cent of these accidents were due to over-speeding, with red-light jumping also contributing significantly to fatal accidents.

Saxena emphasized the correlation between repeat traffic offenses and the likelihood of serious accidents. Citing a 2023 report from the Delhi Traffic Police, he noted that 60 per cent of fatal road accidents in Delhi involved vehicles that had been previously fined for traffic violations. He urged for a tiered insurance premium system based on the number and severity of traffic violations recorded in the government's VAHAN database.

He further noted that international examples, such as the United States, have seen insurance premiums rise by 20 to 30 per cent based on traffic violations, which serves as a significant deterrent for reckless driving. Saxena sought the intervention of Sitharaman's office to initiate discussions with the Insurance Regulatory and Development Authority of India (IRDAI) to develop a framework for implementing such a system in India.

"Linking insurance premiums to traffic violations would align insurance costs with driving risk and lessen the financial burden on insurers from frequent accident claims," Saxena concluded in his letter, urging for prompt consideration of his proposal.

(With inputs from agencies.)