An IRDAI-appointed working group committee has proposed linking motor insurance premiums with traffic violations. This new category of motor insurance premium is dubbed ‘Traffic Violation Premium’.
At present, motor insurance policyholders pay premiums related to motor own damage insurance, basic third-party liability insurance, additional third-party liability insurance or compulsory personal accident insurance, reported LiveMint.

Under the draft proposal, traffic violation premium can be attached to any section of motor insurance cover being purchased, which is chiefly own damage or third-party liability insurance.

The Insurance Information Bureau of India (IIB) will coordinate with the traffic police in the various states and the National Informatics Centre to capture traffic violation data, calculate the violation points of each non-compliant vehicle and make the information available to all general insurers.

The IIB will maintain the historical traffic violation data of all vehicles for the previous two years. In the case where a vehicle has not been involved in any traffic violation during the two years, its traffic violation history will be clean.

The traffic violation points will determine the traffic violation premium to be paid, the draft proposal says. This premium will be paid by the registered owner of the vehicle.

But the traffic violation premium will be attached to a vehicle, rather than the owner. This means that when a new vehicle is bought, it will start with a clean traffic violation history and its owner, when buying motor insurance, will not need to pay any traffic violation premium even if he has a past traffic violation history either as the driver of a vehicle owned by another person or his own vehicle.


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