Motor insurance

How Your Driving Etiquette Can Define Your Motor Insurance Premium?

How Your Driving Etiquette Can Define Your Motor Insurance Premium? Do you know that the recent proposed ideas will bring in-focus your driving etiquette? The Insurance Regulatory and Development…

How Your Driving Etiquette Can Define Your Motor Insurance Premium?

Do you know that the recent proposed ideas will bring in-focus your driving etiquette? The Insurance Regulatory and Development Authority of India has proposed to link motor insurance premium with the traffic violation record. So, if this proposed idea comes into effect then your driving etiquette and highway etiquette shall become the centre-stage for premium pricing.

IRDA has set up a 9-member committee that is working on developing a framework for smooth implementation of the proposed idea. Traffic violations is one of the biggest problems faced on Indian roads which leads to numerous accidents and loss of human life. In order to put a stop on this the ministry of Road Transport and Highway will soon put scrutiny on your 3 lane highway etiquette before issuing or renewing your motor insurance policy.

This proposed linking of motor insurance premium with driving etiquette may soon show positive impact on the driving environment observed in India. Any violations of highway etiquette shall result in increasing your vehicle insurance premium. The IRDA in its circular dated 6th September 2019 has voiced its emphasis on linking traffic violation data i.e. driving etiquettes with motor insurance premium and have stated that the driving etiquette historic data to be utilized as the primary parameter to determine the amount of vehicle insurance premium.

IRDA proposes that if the driver has bad 3 lane highway etiquette then the prices of motor insurance premium to be increased as per the frequency of the traffic rule violation. However, on the other hand if the highway etiquette is safe then such drivers be rewarded for their good driving behaviour with offering discount on the premium amount at the time of motor policy issuance or motor policy renewal.

Till today the motor insurance premium in India is determined by three factors i.e.

a) The make of the vehicle b) The model of the vehicle c) The engine variant.

Determining the premium amount on these factors was becoming irrelevant as the government was not able to find measures to curb road mishaps. But with the proposed idea of IRDA India is all set to see a major positive shift towards better and safe 3 lane highway etiquettes resulting in down-sizing the number of road mishaps. Linking of driving etiquette historic data with motor insurance premium is governments step in right direction to tackle the road-safety issue positively as the smallest traffic violation might lead to increased motor insurance premium. This move of the government shall discourage rather put an end to traffic offenses like over speeding, driving under the influence of alcohol, rash driving etc. as driver shall now be cautious about their driving etiquette.

Soon, if the proposed linking comes into effect, your bad highway etiquette may cause a burning hole in your pocket as you shall be charged traffic violation penalty and higher motor insurance premium. This move of the transport department will differentiate the bad and good driver and even help the department to reward the drivers having good driving etiquettes in terms of discounts offered in insurance Similarly, the bad drivers especially frequent traffic offenders involved in road mishaps can be picked up easily and penalized by traffic police department accordingly.

As per the reports, it is suggested by the transportation department to lower the motor insurance premium of good drivers and promote good driving etiquettes. Further, the implementation of this proposed idea shall help the transportation department to keep a close check on the vehicle owners who have not renewed their motor insurance policy in time.

The nine-member committee has been offered two months to present a full proof framework depicting the methodology of implementing this framework. The committee is also expected to submit an in-depth research and provide recommendations regarding all the associated to aspect of this pilot project. The committee shall provide recommendations on the practices suitable for native Indian Drivers, in-depth research related to international practices of the pilot project, in-depth evaluation of the current scenario related to traffic violations in India and create a full-proof standard point system to cover and register every single traffic violation done by every vehicle owner.

To conclude it is best to say that if the linking of driving etiquette with motor insurance premium comes into effect then Indian roads shall become safe as the number of road accidents will reduce drastically.

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