Motor Vehicle Act Double Whammy: Not just high penalty, your insurance premium will skyrocket too!
Motor Vehicle Act 2019: The Insurance Regulatory and Development Authority of India is mulling to hike insurance premium on the basis of traffic rule violations.
Motor Vehicle Act 2019: On the lines of some traffic rules that are present in some foreign countries, if a driver is found guilty of violations under the new Motor Vehicle Act 2019, then he might have to pay an extra premium on their vehicle's insurance. The IRDAI (Insurance Regulatory and Development Authority of India) is mulling to link insurance premium with Indian traffic rules. So, if someone violates traffic rules in the future, he might have to pay a whopping penalty and higher insurance premium at the time of renewal of his or her vehicle insurance. The insurance companies are going to start a pilot project in this regard in Delhi-NCR.
In the new Motor Vehicle Act 2019, the traffic norms violators have to pay a huge amount for violating the traffic rules - latest news has it that one driver was slapped with a whopping Rs 1 lakh penalty! If the traffic rules violation gets attached with the insurance premium payments, then at the end of the year or at the time of renewal of the insurance premium, the violator will have to suffer again - by paying higher insurance premium. The Insurance Regulatory and Development Authority of India (IRDAI) is going to form a committee that will submit its recommendations in regard to linking insurance premium with motor vehicle violations.
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As per the Motor Vehicle Act 2019, penalty for violating the traffic norms would now cost around 30 per cent to 40 per cent higher and for running a vehicle without insurance, will now cost Rs 2,000 fine instead of Rs 1,000. In order to make people aware about the new motor insurance norms, the IRDAI has started a pilot project in four states where those vehicle owners who haven't renewed their motor insurance, will be informed about the same.
According to the General Insurance Council data, around 50 per cent of the vehicles running in India are not insured and major contribution in this non-insured vehicles are two-wheelers. This move is to control accidents in coming times as awareness hold key in this major drive.