Furthermore, the recommendations given by the group say, the traffic violation premium will follow the fortune of vehicle, rather than the owner. That is to say, a new vehicle will start with no traffic violation history, irrespective of the fact that the vehicle owner may have previous violations history as a driver or with another vehicle.
“This apparently may appear inequitable, however, it was deliberated and kept this way for the sake of simplicity”, the working group said.
Also, after sale of vehicle, the traffic violation premium shall start from ground zero from the date of vehicle ownership transfer and build depending upon the traffic violations caused by vehicle after ownership transfer.
The insurance information bureau (IIB), which is promoted by the Insurance regulatory and development authority of India (Irdai), will work with state’s traffic police and the National Informatics Center to collect data and make it available to all general insurers.
This will be run on a pilot basis in the national capital territory. Since, a large number of vehicles enter NCT on a daily basis, hence all the vehicles from other states that cause traffic violation in NCT, will have to pay traffic violation premium at the time of insuring their vehicles.
“All general insurers registered in the country shall need to modify their motor insurance policy
schedule to clearly reflect a fifth section and make changes in their IT systems to mandatorily collect and account for this premium as a separate and additional fifth section”, the working group said.
The stakeholders need to give their views to the regulator on the recommendations of the working group by February 1, 2021.
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