Delhi Lt Governor proposes linking of vehicle insurance to traffic violations

In a bid to curb reckless driving and enhance road safety, Delhi Lieutenant Governor (LG) VK Saxena has written to Union Finance Minister Nirmala Sitharaman, proposing a significant change to vehicle insurance premiums.
In his letter, Saxena called for a dynamic insurance structure where premiums are directly tied to the frequency of traffic violations committed by a vehicle. The approach is aimed at introducing a financial deterrent to promote more responsible driving across India.
Saxena emphasised that linking insurance costs to the risk profile of drivers would not only incentivise safer driving but also reduce the financial strain on the insurance industry caused by frequent claims.
The Lieutenant Governor also noted that similar models in countries like the United States and several European nations have proven effective in reducing road accidents and fostering a culture of safer motoring. “By adopting this system, India could significantly reduce its alarming rate of road accidents,” he said.
Recent statistics from the Ministry of Road Transport and Highways (MoRTH) paint a troubling picture of road safety in India. A report reveals that over-speeding and red-light violations are leading causes of fatal accidents. A World Bank study highlights the direct link between repeated traffic violations and severe crashes.
In 2022 alone, India recorded over 4.37 lakh road accidents, with over-speeding accounting for nearly 70 per cent of these incidents, and red-light violations contributing heavily to the death toll.
Delhi’s own accident data further supports Saxena’s proposal. In 2023, the Delhi Traffic Police reported that 60 per cent of fatal accidents involved vehicles with prior traffic violations.
More alarmingly, vehicles with over three recorded violations in a year were disproportionately involved in severe accidents.
Saxena pointed out that globally, index-linked insurance premiums have successfully reduced traffic violations and improved road safety outcomes.
He also said that if India were to adopt this model, it could set a new benchmark in road safety initiatives, not only enhancing public safety but also providing a sustainable framework for transportation in the future.
The LG urged the Finance Minister to engage the Insurance Regulatory and Development Authority of India (IRDAI) in developing a robust framework for the proposed system.
“If implemented, this policy could be a pivotal step towards reducing road fatalities, preserving lives, and ensuring a safer, more sustainable future on Indian roads,” Saxena concluded.