Delhi LG VK Saxena Proposes Linking Vehicle Insurance Premiums to Traffic Violations
Delhi Lieutenant Governor VK Saxena has written to Union Finance Minister Nirmala Sitharaman, urging her to link vehicle insurance premiums to the number of traffic violations recorded against the vehicles. Saxena believes this measure will deter traffic violations and improve road safety.
He noted that similar measures have been successfully implemented in countries like the United States and many European nations. Saxena wrote, “Resptd Smt Nirmala Ji I am writing to your kind attention to a matter of critical importance concerning road safety and vehicular insurance in India. I would like to suggest for your consideration that insurance premium 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.”
According to the Ministry of Road Transport and Highways (MoRTH), India recorded over 4.37 lakh road accidents in 2022, resulting in approximately 1.55 lakh fatalities. Over-speeding accounted for nearly 70 percent of these accidents, while violations like red-light jumping also contributed significantly.
World Bank data indicates that vehicles with multiple traffic violations have a 40 percent higher risk of being involved in fatal crashes compared to those with a clean driving record. Delhi’s accident statistics support these findings. Saxena mentioned that a 2023 report from the Delhi Traffic Police showed that 60 percent of fatal road accidents involved vehicles previously fined for traffic violations, mainly over-speeding and red-light jumping.
Saxena suggested a layered insurance premium system based on the frequency and severity of traffic violations recorded in MoRTH’s VAHAN database. He believes that vehicles frequently challenged for offenses like over-speeding and dangerous driving should pay higher insurance premiums. This financial deterrent would encourage better driving behavior.
Saxena urged the Insurance Regulatory and Development Authority of India (IRDAI) to create a framework for this system. He believes that linking insurance premiums to traffic violations would align insurance costs with risk and reduce the financial burden on insurers due to frequent accident claims. Saxena concluded, “This market-driven solution would encourage responsible driving, and contribute to reduced road accidents, saving lives, and ensuring better management of insurance claims. I look forward to your kind consideration of this proposal.”
Doubts Revealed
Delhi LG -: Delhi LG stands for Delhi Lieutenant Governor. He is a high-ranking official who helps govern Delhi, the capital city of India.
VK Saxena -: VK Saxena is the name of the current Lieutenant Governor of Delhi. He is responsible for various administrative functions in the city.
Union Finance Minister -: The Union Finance Minister is a top government official in India who manages the country’s finances, including the budget and economic policies. Currently, this position is held by Nirmala Sitharaman.
Vehicle Insurance Premiums -: Vehicle insurance premiums are the amount of money you pay regularly to an insurance company to protect your vehicle against damages or accidents.
Traffic Violations -: Traffic violations are actions that break the rules of the road, like speeding or running a red light. These can lead to fines or other penalties.
Road Safety -: Road safety means making sure that roads are safe for everyone, including drivers, passengers, and pedestrians, to reduce accidents and injuries.
IRDAI -: IRDAI stands for Insurance Regulatory and Development Authority of India. It is a government agency that oversees and regulates the insurance industry in India.
Framework -: A framework is a basic structure or plan that helps organize and guide how something should be done. In this case, it would be a plan for linking insurance premiums to traffic violations.
US and Europe -: The US stands for the United States of America, and Europe is a continent that includes many countries like France, Germany, and Italy. These places have different rules and systems for managing things like vehicle insurance.