The government is mulling out ways to link motor insurance premiums with traffic violations in order to make people more accountable and responsible towards following traffic rules.
The Insurance Regulatory and Development Authority of India (IRDAI) is studying this proposal of linking insurance premiums with traffic violations and has been formed a working group to formulate a plan on its implementation framework and methodology in NCT and Delhi.
If this law comes into practice then motor vehicle owners in India may have to pay heavy insurance premiums for their vehicles if they are found to be violating the traffic rules in addition to the existing fine.
The government is planning to link the insurance premiums with traffic violations to keep a tap on those commuters who regularly violate traffic rules.
The main objective of the government here is to bring down the number of accident cases and encourage people to follow traffic rules.
Last month, the Ministry of Road Transport and Highways had notified the provisions of the Motor Vehicles (Amendment) Act, 2019, and they were implemented in several states from September 1.
The law enforces heavy fines and stricter penalties for traffic violations.
With the coming of the new law, not only people will have to pay heavy fines but they may even have to shed extra money for their vehicle's insurance premium if they are found to be violating traffic rules once the proposed linking of traffic violations with insurance premiums comes into practice.
Moreover, the insurance regulator through its pilot project has conveyed it to the people of four states to make sure they have their motor vehicle insurance up to date.
Meanwhile, insurance companies will also be taking a pilot project to work on how insurance premiums can be linked to traffic violations by motor vehicle owners.
According to the General Insurance Council, almost 50% of motor vehicle owners who are commuting without any insurance cover are the ones who own two-wheelers.