Delhi Lieutenant Governor Vinai Kumar Saxena on Wednesday urged Union Finance Minister Nirmala Sitharaman to link insurance premiums of vehicles to the number of traffic violations recorded against them, in a bid to enhance the road safety and traffic discipline.
In a letter, he proposed the implementation of a layered insurance premium system that reflects the driving behaviour of drivers based on the frequency and severity of traffic violations.
Highlighting a co-relation between frequent traffic offenders and accidents risk, LG Saxena suggested that the tiered insurance premium system be introduced in India. He said that a vehicle which has been frequently fined for offences such as over-speeding, red light jumping, and dangerous driving should pay higher insurance premium.
This financial deterrent would promote a better and more responsible driving behaviour, he said, adding how a similar system has been successfully implemented in the US and European nations, where insurance premiums increase substantially based on traffic violations.
He also mentioned recent data citing Delhi Traffic Police's report, World Bank, and the Ministry of Road Transport and Highway as he stressed that vehicles with more than three traffic challans in a given year were fund to have a "disproportionately high involvement in severe accidents".
"As per the Ministry of Road Transport and Highway, India recorded over 4.37 lakh road accidents in 2022, resulting in approximately 1.55 lakh fatalities. Notably, over-speeding accounted for nearly 70% of these accidents, while violations such as red-light jumping contributed significantly to fatal accidents. Analysis of accident data by the World Bank indicates that vehicles with multiple traffic violations have a 40% higher risk of being involved in fatal crashes compared to those with a clean driving record. Delhi's own accident statistics corroborates these findings. According to a 2023 report of the Delhi Traffic Police, 60% of fatal road accidents involved vehicles that had previously been fined for traffic violations, primarily over- speeding and red-light jumping," the letter noted.
LG Saxena asked the Union Finance Minister to engage the Insurance Regulatory and Development Authority of India (IRDAI) to take prompt action and establish a framework for index-linked insurance premiums.
The letter further said that by implementing this market-driven policy, India can take a significant step towards creating safer roads, encourage responsible driving, saving lives, and ensuring better management of insurance claims.