Proposal to Link Vehicle Insurance to Traffic Violations

Delhi Lieutenant Governor (LG) VK Saxena has proposed linking vehicle insurance premiums to traffic violations in a bid to curb reckless driving and improve road safety. He has sent a letter to Union Finance Minister Nirmala Sitharaman outlining this proposal.

Saxena suggests that insurance premiums should be dynamically linked to the number of traffic violations committed by the driver. This system is expected to encourage safer driving by imposing higher financial consequences for reckless driving.
He emphasized that similar systems in countries like the United States and Europe have significantly reduced road accidents. By implementing this model, India could see a sharp reduction in its alarming road accident rates.

In 2022, India recorded over 437,000 road accidents, with over-speeding responsible for nearly 70% of incidents. In Delhi alone, 60% of fatal accidents in 2023 involved vehicles with a history of traffic violations.
Saxena has urged the Finance Minister to collaborate with the Insurance Regulatory and Development Authority of India (IRDAI) to develop a robust framework for this system. He believes that if this policy is implemented, it could lead to a significant reduction in road fatalities and contribute to a safer transportation system in India.