February 24, 2024

Does A Traffic Violation Impact Your Car Insurance Premium?

3 min read
car insurane

The Insurance Regulatory and Development Authority of India (IRDAI) constantly changes insurance plans with the shifting market dynamics. The IRDAI recently appointed a working committee to develop a proposal that would tie your driving record to your car insurance online cost.

Let’s take a look at the committee’s suggestions. #

Suggestions Made By The Working Committee

  • The premium breakdown of a Bajaj Allianz car insurance online policy would include a new section called “Traffic Violation Premium” (TVP). Depending on your history of traffic violations, this section would detail any additional premium due.
  • Both comprehensive and third-party liability plans would have the TVP section.
  • The past two years’ worth of traffic violations would be considered.
  • The TVP would be applicable from renewal for new vehicles.
  • When it comes to used cars, the TVP is determined after the vehicle has been sold to another person. It would be applicable during renewal periods.
  • Even if you lend your car to someone else, any infraction committed by another driver would increase the cost of your insurance.

How would the TVP be determined?

A point system would be developed to determine the Traffic Violation Premium you would be responsible for paying. For a particular violation, there would be specific points. For instance, the draft created by the committee would award 100 points for drunk driving while awarding only 10 points for incorrect parking. Points would continue to accrue for the violations you commit during the policy year. The points would be added up at renewal. Up to 20 points would result in no additional premium being applied. However, you would be required to pay the additional Traffic Violation Premium if your point total was 21 or higher.

The additional traffic violation premium for two-wheelers can cost between INR 100 and INR 750, while the premium for four-wheelers—private and commercial—can cost between INR 300 and INR 1500. You will still continue to be able to renew Bajaj Allianz car insurance online.

How Does The System Function?

The committee announced that the Insurance Information Bureau (IIB) would coordinate with the National Informatics Centre and the traffic police of various States. The IIB would compile information on traffic infractions and determine each vehicle’s violation points. This information would be shared for general insurance companies that offer motor insurance policies to charge the Traffic Violation Premium when they issue the policy for the relevant car.

The Purpose Behind This Action

Making people aware of traffic laws is the primary goal behind implementing the concept of Traffic Violation Premium. The higher premium would discourage traffic offenders who can avoid fines because their insurance would become too expensive to cover their habits. Make it a habit to check car insurance online periodically.

What Does It Imply For You, The Client?

If you are a customer with a spotless record, you may receive a concession on your premium. Although it is not mentioned in the committee’s proposal, experts think that insurance companies would penalise offenders while offering good drivers a concession on their premiums. Therefore, if you improve your driving record, you’ll pay less for car insurance online. ##

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##All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply

#Visit the official website of IRDAI for further details.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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