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Old 18th January 2021, 22:42   #1
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Default IRDAI: Traffic violators should pay higher insurance premium

IRDAI has invited inputs of all stakeholders on the recommendations till February 1, 2021.
Quote:
New Delhi: A working group set up by regulator IRDAI has suggested introduction of 'Traffic Violation Premium' in addition to own damage and third party and other types of motor insurance premium.

The group has recommended inserting a fifth section to motor insurance called "Traffic Violation Premium" in addition to motor own damage insurance, basic third party insurance, additional third party insurance and compulsory personal accident premium.

"This section will float over both Own Damage and Third Party sections of Motor insurance and can be attached to any section of motor insurance cover being purchased, chiefly, Own Damage or Third Party insurance," said the exposure draft issued by Insurance Regulatory and Development Authority of India (IRDAI).
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Old 18th January 2021, 22:54   #2
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Default re: IRDAI: Traffic violators should pay higher insurance premium

Insurance in India follows the mindless chaos that we are used to and has completely lost touch with reality.
When was the last time you got into an accident and got the insurance company of the offending automobile to pay for your damages? Heck - I only see the Third party (mandatory) cover keep going up and have not seen any data published that specifically link claims on third party that justify the astronomical increase. I also get the feeling that Insurance companies are subsidising the own damage premiums by padding their margins. If anyone has this data, do put it up as it would help explain the scam called auto insurance. Now to the issue at hand wrt. increasing premiums for traffic violations, I would think that this ought to be offset with a discount for every violation free year that elapse.... it cannot be a one way street.
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Old 19th January 2021, 08:38   #3
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

I wholeheartedly agree. Those who violate the law & get tickets should pay higher premiums. That's how it is in most developed countries. In USA, drivers are scared not just of the high fines, but even the impact it'll have on their insurance premiums.

Equally, those of us who don't get challans should receive a discount then .
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Old 19th January 2021, 08:58   #4
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

I don't know whether to support this or oppose this. Isn't this double punishment for one offense? Huge traffic fine + insurance premiums.
In an ideal scenario where there are proper redressal mechanisms for wrong challan, I will 100% support this move.

Many of our own team members have been a victim of wrong challans. We pay not to get into a long hassle. Also, there is no proper redressal mechanism. Now this will also impact our premiums.
Second issue is that if I maintain a proper record and have zero violations, what is the benefit for me?

We had read a lot about insurance premiums going down due to covid and vehicle being immobile however when my renewal date came I didn't see any such thing.

Also it would be interesting to see how many of us has actually utilized the third party insurance.

Last edited by J4J : 19th January 2021 at 09:07.
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Old 19th January 2021, 09:22   #5
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

This is a pretty good idea and is implemented in several countries including where I am now, Australia.

In Australia, we are required to take compulsory third-party (CTP) insurance before registering our vehicle (annual registration).
Traffic violations here are based on a fine+demerit system.
Many insurance providers have a demerit point linked CTP policy.

for example, lets say you are trying to register a 2 year old hatchback.
The cheapest quote would be provided to the person with zero demerit points (no traffic violations, therefore, safe driver)
However, if you have even one demerit, the insurance premium jumps up dramatically....nearly by $300 for the year.

I think the possibility of insurance premiums being linked to traffic violations should definitely ship a lot of drivers into shape '

...Sid
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Old 19th January 2021, 09:26   #6
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

Typical symptomatic approach.

To impose higher premium on traffic violators, the foundation has to be clean - where only violators are booked and only for the violations that actually happened. The other part is that ALL vehicles must be insured in first place.

Both the above points dont have loop-holes, they have multiple wide gates to get thru.

A recent article said only 57% vehicles in India are insured. If they just bridge this, the Insurance companies will be far more profitable, and not have to resort to such "advanced" and "developed" thinking.
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Old 19th January 2021, 09:30   #7
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

This will only increase the Premiums for "indirect tax collectors".

If caught, their pitch will be 400 do warna complaint lodge ho gayi to insurance mein 4000 badh jayega!
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Old 19th January 2021, 09:47   #8
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

Quote:
Originally Posted by GTO View Post
I wholeheartedly agree. Those who violate the law & get tickets should pay higher premiums. That's how it is in most developed countries. In USA, drivers are scared not just of the high fines, but even the impact it'll have on their insurance premiums.
Do they ask you while you are taking an insurance quote in USA if you have a driving ticket? I thought they only asked whether your licence was suspended or cancelled for any reason (exhausted the merit points or you committed a driving offence which calls for license suspension)?

I have been speaking to my friends in Delhi and there are camera challans being issued left right and center for quite a few of them. Given how haphazardly and dare i say unlawfully the system in implemented, speeding ticket when there is no posted sign limit, crossing on red when you crossed the light on green but it turned red while you were in the middle of the junction due to traffic etc etc, higher insurance on top will make it terribly unfair.
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Old 19th January 2021, 09:57   #9
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

Traffic violation detection and execution in India is still in very early stages. There have been scores of faulty detection through camera and challan applied, me being the victim for atleast 3 cases where the number plates are totally different my registered car and yet fine has been imposed. Adding this to the Insurance premium is going to make people move away from buying premiums altogether. It is already known fact that a majority of vehicle owners skip buying Insurance, getting these in the Insurance ambit should be the priority not penalize the honest Insurance buyer. This is getting more like to the central govt, tax the tax payers. Totally a wrong move by the IRDAI
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Old 19th January 2021, 10:27   #10
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

Quote:
Originally Posted by GTO View Post
Equally, those of us who don't get challans should receive a discount then .
Something on similar lines was implemented by the Pune Police, not for law abiders though, but for those who paid the fines.

Quote:
In a very novel idea to motivate people to follow traffic rules, the Pune traffic police have decided to offer discount coupons to city residents as part of its 'Aabhaar scheme'.

These discount coupons could be redeemed at about 115 centres including hotels, shops and other facilities in the Pune city. These coupons give discounts from 5 per cent to 50 per cent on various products.
https://www.timesnownews.com/mirror-...on-time/508435



On a similar note, in some countries, the fine for traffic violations is proportionate to your income.

But I doubt this will work in India, where hardly 7% pay Income tax or file returns.
https://www.weforum.org/agenda/2018/...o-your-income/

Last edited by RedTerrano : 19th January 2021 at 10:29.
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Old 19th January 2021, 10:39   #11
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

Most traffic violators in India get away with Rs. 200 for minor offences (no helmet, breaking traffic signal, no PUC etc.). While I endorse higher premiums for repeat offenders, this will end up being mostly lip service.

As rightly pointed out, claiming third party insurance has to get easier as well.
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Old 19th January 2021, 10:55   #12
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

A welcome & much appreciated move

Here's one challenging situation...

One fine evening, an Eeco rear ends my SCross. The damages are minor, the plastic bumper has sheared a little, the steel has bent a little, the side quadrapanel has bent & the plastic cladding has protruded a little. The damages are not visible from a distance of say 15-20 feet, but is quite evident on closer inspection.

a. No one knows where SI is other than he's on the rounds (apparently no one can reach him over the phone either) Inspector is out of town as well. Police says, try to settle amicably as there's no human injury.

b. Since it's a traffic offense, I or both parties have to drive about 18 Km to traffic police station to lodge a complaint although the police station is only 1.5 Km away
c. Write a complaint on the offender & get a statement from traffic police station & wait for the police constable to submit to RTO
d. Inspector at RTO issues a statement conforming to my police complaint
e. After this, I'm free to take the car to Maruti ASC explain the claim through Eeco's insurance so that I can save on my no-claim bonus.

f. The other option is, I take the car to Maruti ASC claim my B2B insurance & forgo my no-claim bonus.

Coming back to on-topic - The premium goes up only when b+c+d is done not just with a

Question I leave here is - if you were me, what would you choose? b+c+d+e or just f?

Edit - Here's the best part - challenges
b. Tough job is to finding where the CCTP office is located. When one goes there, the SI or head constable has to be there, writer has to be there; the writer has to lodge a statement exactly as per the complaint I write. Most often, they write what they think about the situation (poor copy + paste job). This process usually takes anywhere from 1 to 2 hours although it can be done under 20 minutes
c. Accident happens in the evening, but RTO works Mon-Fri 9 Am to 5 Pm & only for certain hours of the day the RTO inspector is at RTO + he has dedicated times to visit such incidents. So traffic police asks us to come every day while RTO inspector might have a look at our case the next day or day after. And if the next day is Saturday, one has to wait until Tuesday (sometimes Monday's are reserved for licenses & new vehicle registrations only). Again not necessary it has to be Monday, some RTO's observe this any day of the week.
d. Inspector at RTO will ask you just 3-4 questions; after that exams like JEE, SAT, GRE, TOEFL suddenly appears to be easy.

Last edited by aargee : 19th January 2021 at 11:13.
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Old 19th January 2021, 11:17   #13
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

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Originally Posted by condor View Post
To impose higher premium on traffic violators, the foundation has to be clean - where only violators are booked and only for the violations that actually happened. The other part is that ALL vehicles must be insured in first place.
This is main crux of the problem.

Now it puts more power in the hands of the police, increasing their earning potential. Those who insist on being honest and pay the fine get penalized with higher insurance premium. While those who chose to bribe the police will escape any increase in premium. Guess who many will be willing to pay fine instead of bribe. This pushes more people to opt to bribe than pay fine honestly.

Those who never insure their vehicles are unaffected since they always pay the bribe.
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Old 19th January 2021, 11:21   #14
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

While I wholeheartedly welcome the move (as long as there is a corresponding NCB-like discount for the traffic rule adherers), most violations never actually get reported because of the 'under-the-table' transactions.

However, tier-1 cities now have e-challans for traffic rule violators which should help a bit. Although the change won't happen overnight, along with more e-challans and higher insurance premiums, there could be greater discipline, a step in the right direction.

Slightly off topic, but I feel traffic police should legitimately be able to keep some proceeds from the fines they collect, even to the tune of 50%. In that case, there is little incentive for them to accept 'under-the-table' payments. There will be higher revenue for government, greater income for cops, and more fear among people to violate rules.
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Old 19th January 2021, 11:44   #15
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Default Re: IRDAI: Traffic violators should pay higher insurance premium

This will lead to increased "bribing the traffic police" instead of paying challan fee plus increased insurance premium.

If we see, after enhancing the fine structure from 100 to 500, 1000 and 10,000, most of the people who were paying fine earlier moved to "unbilled settlement" with cops.

However, few sincere folks like us who still continued with paying fine and collecting receipts will now look back and see if we can change the track to "personal settlement"

I am sorry for being negative, but how can anyone sustain continuously increasing fine structure when there is ABSOLUTELY no effort from government in enabling "following rules"

Government should know its responsibility is both Making rules and enabling public to follow rules.
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