With the objective of responsible and safe driving, Delhi Lieutenant Governor Vinai Kumar Saxena has written to Union Finance Minister, Nirmala Sitharaman, urging her to link insurance premiums of vehicles to the number of traffic violations recorded against the vehicle.
Vehicles with a history of violations, including speeding, reckless driving, or other traffic offences, would be required to pay higher premiums. This financial deterrent would incentivise safer driving practices and foster a culture of responsible driving on Indian roads.
According to Saxena, this financial deterrent driven approach, practised in the US and European countries, would promote responsible driving behaviour, leading to reduction in accidents, saving lives, and ensuring more efficient management of insurance claims. The LG has requested the Union Finance Minister to consider his proposal for a tiered insurance premium system that directly reflects the driving behaviour of individual motor drivers.
The proposal comes in the wake of alarming statistics from the Ministry of Road Transport and Highways (MoRTH), which reported over 4,37,000 road accidents in 2022, resulting in approximately 155,000 deaths. Saxena noted that over-speeding accounted for nearly 70 per cent of these accidents, while violations like red-light jumping also significantly contributed to fatalities.
Saxena has underlined in his letter that implementing such a system would not only align insurance costs with the actual risk posed by individual drivers but will also reduce the financial burden on insurers resulting from frequent claims.
The LG has also urged the Union Finance Minister to engage the Insurance Regulatory and Development Authority of India (IRDAI) to take immediate action to establish a framework for index-linked insurance premiums. By implementing this policy, India can take a significant step towards creating safer roads, saving lives, and ensuring a more sustainable transport system for generations to come, the letter said.
“I am writing to your kind attention to a matter of critical importance concerning road safety and vehicular insurance in India,” Saxena wrote.
“I would like to suggest for your consideration that insurance premiums should be index-linked with the number of traffic violations recorded against a vehicle, which would have a salutary impact on road safety and traffic discipline.”
The letter mentioned the recent data from the Ministry of Road Transport and Highways (MoRTH) which reveals a disturbing trend of over-speeding and red-light jumping, that contribute significantly to fatal accidents. A comprehensive study by the World Bank further underscores the correlation between multiple traffic violations and a heightened risk of severe crashes and emphasises the need for urgent action.
Analysis of accident data by the World Bank indicates that vehicles with multiple traffic violations have a 40 per cent higher risk of being involved in fatal crashes compared to those with a clean driving record.
In support of his proposal, Saxena in his letter, has highlighted Delhi’s own accident statistics that corroborate these findings. According to a 2023 report of the Delhi Traffic Police, 60 per cent of fatal road accidents involved, vehicles that had previously been fined for traffic violations, primarily over-speeding and red-light jumping. Vehicles with more than three traffic Challans in a given year were found to have a disproportionately high involvement in severe accidents.
