Delhi Lieutenant Governor VK Saxena has written to Union Finance Minister Nirmala Sitharaman regarding a proposal where vehicles with a history of violations, including speeding, reckless driving, or other traffic offences, would be required to pay higher insurance premiums.

According to the LG, this financial deterrent would incentivise safer driving practices and foster a culture of responsible motoring on Indian roads.

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LG Saxena has urged the FM to link insurance premiums of vehicles to the number of traffic violations recorded against the vehicle, requesting her to consider the proposal for a tiered insurance premium system that directly reflects the driving behaviour of individual motor drivers.

Saxena has underlined in his letter that implementing such a system would not only align insurance costs with the actual risk posed by individual drivers, but will also reduce the financial burden on insurers resulting from frequent claims.

According to the high officer, this financial deterrent driven approach which is practiced in the USA and European countries, would promote responsible driving behaviour, leading to a reduction in accidents, saving lives, and ensuring more efficient management of insurance claims.

The LG has mentioned in his letter the recent data from the Ministry of Road Transport and Highways (MoRTH) which revealed a disturbing trend of over-speeding and red-light jumping that contribute significantly to fatal accidents.

A comprehensive study by the World Bank further underscored the correlation between multiple traffic violations and a heightened risk of severe crashes and emphasised the need for urgent action, the high officer mentioned.

In support of his proposal, the LG has highlighted Delhi’s own accident statistics, where according to a 2023 report of the Delhi Traffic Police, 60 per cent of fatal road accidents involved vehicles that had previously been fined for traffic violations, primarily over- speeding and red-light jumping.

With index-linked insurance premiums, India can position itself at the forefront of road safety initiatives and set a benchmark for other nations to follow, the LG emphasised.

Saxena has also urged Sitharaman to engage the Insurance Regulatory and Development Authority of India (IRDAI) to take immediate action to establish a framework for index-linked insurance premiums.