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How Your Driving Record Will Affect Your Motor Insurance Premium

Published on November 6, 2020. EST READ TIME: 5 MIN

With rising number of people preferring to travel on bike or car to their work or for any other leisure purpose, there has been a rise in number of vehicles plying on the road. Considering the time and deadline pressures we feel at our work or in our daily lives, there could be instance where we are found neglecting traffic rules or are involved in an accident.

Under the Vehicles Act 1988 and Motor Vehicles (Amendment) Act 2019, it is mandatory that we have valid car insurance or bike insurance for our cars and bikes at all times. Motor Insurance Premium in India is mainly decided on the following factors.

  • Make of the Vehicle

  • Model of the Vehicle

  • Engine Variant & Cubic Capacity

  • Age of the Vehicle

  • RTO location and Zone

So What is Changing in Calculation of Motor Insurance Premium?

Insurance Regulatory and Development Authority of India (IRDAI) has set up a 9 member committee to look into ways to connect your motor insurance premium calculation to your traffic violation record. So if the recommendations of the panel are incorporated your driving etiquette and highway etiquette would become important factor in your motor insurance premium calculation.

What are the steps being taken by the IRDA?

IRDA has proposed that a motorist having a bad traffic record would witness a rise in the premium he pays for the vehicle and the motorists having a good record would be able to get reduced premium for insuring their vehicle. IRDA is also keeping a tab whether you have been doing motor insurance policy renewal on time or not.

Transport department has initiated a move of connecting the vehicle database to the IRDA database using the Vahan Software to the IRDA database. This will help out the IRDA in finding out the vehicle buyers who do not have motor insurance for their vehicle. With passage of Motor Vehicles (Amendment) Act 2019, the traffic authorities have been authorized to levy hefty fines on the motorists who are driving the vehicle without a valid insurance.

Deaths due to Road accidents in India stand at 1.49 lakh in 2018, and the government intend to bring the situation under control by enacting changes including Motor Vehicles (Amendment) Act 2019, so buckle up and always make a point to get your motor insurance renewal done on time. With option of buying motor insurance or renewing motor insurance online, we should be able to be a responsible citizen and get insurance for vehicles.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.


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