Traffic violations can happen for numerous reasons. Whatever they are, violating traffic rules frequently can harm one’s car insurance rates, as insurance companies perceive such beneficiaries as high-risk cases. With rising cases of road safety violations, insurance providers are doing their bit to reduce such incidents by increasing the car insurance premium rates for high-risk individuals whose driving histories project more instances of such violations.
Before you buy a car or car insurance, go through the factors mentioned in this article on how traffic violations can lead to higher car insurance rates, what types of violations can impact the most, and what drivers can do to mitigate these effects.
Understanding Traffic Violations in India
India has one of the highest rates of road traffic accidents globally, with over 150,000 fatalities reported annually. In response to this alarming trend, the Indian government has implemented stricter traffic laws and increased fines for violations. These measures aim to promote safer driving habits and reduce accidents on the road. However, they also have significant implications for car insurance premiums.
How Traffic Violations Influence Insurance Rates
A traffic violation can happen due to reasons such as accidentally missing a red light or in case of dire medical emergencies. However, having a recorded history of back-to-back traffic violations is indicative of an individual’s risky behaviour to car insurance companies who in turn, raise the premium rates of car insurance for such applicants.
The more violations a driver has, the higher their perceived risk, which typically results in increased insurance costs. The rise in car insurance premium rates also depends on the following factors.
Severity of the Violation: Offenses such as drunk driving, and hit-and-run cases are considered to be high-risk behaviour and can spike up the car insurance premium rates by 70%. If an individual’s police record shows repeated traffic violation incidents, it is highly likely that they may not even get to purchase a car insurance online.
Frequency of Violations: If one has a record of regularly breaking traffic rules, it shows that despite several warnings, there has been very little progress in their driving behaviour. This pattern of repeated traffic violations indicates further such incidents when insurance providers analyse an applicant’s driving history. Such individuals face steeper increases in their premium rates. Insurance providers often categorize drivers with multiple violations as high-risk clients.
Type of Violation: Different traffic violations carry varying levels of impact on insurance rates. Common offenses like over-speeding or jumping traffic signals may lead to moderate increases, while severe violations can dramatically affect premiums.
Common Traffic Violations and Their Financial Implications
No one buys vehicles to commit traffic violations. However, if you find yourself in such a situation, here is a list of moving violations that can invite hefty fines and cause an insurance rate increase.
Over-speeding: Fines range from ₹1,000 to ₹5,000 depending on the severity. Over-speeding can lead to a moderate increase in insurance premiums.
Drunk Driving: This serious offense incurs hefty fines starting at ₹10,000 and can lead to imprisonment. It significantly raises insurance costs due to the high-risk nature associated with such behavior.
Jumping Red Lights: Fines can range from ₹5,000 to ₹10,000. This violation is also viewed seriously by insurers and can result in increased premiums.
Driving Without a License: The fine for this offense is around ₹5,000 and may also lead to imprisonment. It indicates a disregard for road rules, which insurers consider when calculating risk.
The Long-Term Impact of Traffic Violations
The repercussions of traffic violations extend beyond immediate fines; they can affect a driver’s financial situation for years. Insurance violations typically remain on a driver’s record for three years or more. During this period, drivers may face higher premiums that reflect their risk profile.
Example of Premium Increases
To illustrate the potential financial impact:
A driver with a single minor violation might see an increase of about 20% in their premium.
Conversely, a driver with multiple serious offenses could experience premium hikes exceeding 60%.
Government Initiatives and Future Implications
The Indian government is considering linking vehicle insurance premiums directly to the number of traffic fines registered against each vehicle. This initiative aims to encourage safer driving practices by making drivers financially accountable for their actions on the road 1. Such measures are already in place in several countries and could serve as an effective deterrent against reckless driving behaviors.
Tips for Maintaining Affordable Insurance Premiums
To keep insurance costs manageable despite potential traffic violations, drivers should consider the following strategies:
Maintain a Clean Driving Record: Avoiding traffic violations is the most effective way to keep insurance premiums low.
Take Defensive Driving Courses: Completing recognized driving courses can sometimes lead to discounts on insurance premiums.
Shop Around for Insurance: Different insurers have varying policies regarding how they assess risk based on driving records. Comparing quotes can help find more favorable rates.
Consider Usage-Based Insurance: Some insurers offer policies that base premiums on actual driving behavior rather than historical data.
Regularly Review Your Policy: Staying informed about your coverage and any potential discounts available can help manage costs effectively.
Conclusion
Traffic violations have significant implications for car insurance rates in India. Understanding how these violations impact your financial responsibilities is crucial as road safety becomes increasingly prioritised by government authorities and insurance providers. By maintaining safe driving habits and being aware of the consequences of traffic violations, drivers can safeguard their wallets while contributing to safer roads across India.
In summary, being proactive about your driving behaviour not only helps keep you safe but also ensures that your car insurance remains affordable over time.
