It is not just traffic police which can charge you hefty penalties on traffic violation; your insurance companies can hike your premium if they find you violating traffic rules like drink and drive, overspeeding or rash driving.
In a recent development, the insurance regulator has constituted a working group to look at linking insurance premium with traffic violations. The nine-member group would include representatives of Delhi Traffic Police, general insurers, IRDAI and insurance information bureau of India (IIBI).
This essentially indicates that violating traffic rules would lead to a hike in insurance premium, insurance companies may reward policyholders if your clients abide by traffic norms sincerely. Currently, insurance premium depends on make year and car model. However, in most developed nations like US, insurance premiums are also linked with driving style.
Among other key areas the committee will look at are
- Study international practices on linking of traffic violation with insurance premium
- Evaluate the current point system for traffic violation of various states and suggest uniform point system for each traffic violation
- Suggest system of access of traffic violation history data of each vehicle
- Suggest modalities to implement these suggestion in Delhi on a pilot basis
The working group is to submit its recommendations in eight weeks.