Impact of Traffic Violations on Bike Insurance Premiums

As motorists navigate through the busy roads, traffic police keep an eye out for any violations, and those who are caught breaking these regulations face hefty fines and increased insurance premiums.

Traffic Challans in India

Traffic violations are fines given to motorists for breaking traffic rules in India. Besides the financial burden, these penalties can result in potential changes in own-damage premiums of bike insurance.

According to the report by the Ministry of Road Transport and Highways (MoRTH), over 4.7 crore challans were issued in 2022 for traffic violations, amounting to 4654.26 crores. Some of the common ones include:

• Over-speeding (69% of reported cases)
• Driving without a helmet (28% of reported cases)
• Driving under the influence of alcohol
• Jumping red lights
• Using mobile phones while riding

India registers around 10% of road crash deaths globally, cites the World Health Organization. In 2021, data from MoRTH recorded over 1,53,000 road traffic deaths in India, with a significant percentage involving two-wheelers. These are the key findings:

• 4% of fatalities due to over-speeding
• 30% of two-wheeler rider deaths due to non-helmet use
• 6,975 fatalities due to drunk driving

How Traffic Challans and Insurance Costs Correlate?

Now, traffic violations in India are linked to bike insurance premiums, and insurance providers see repeat violators as high-risk individuals. This means that riders who have a history of traffic violations will pay higher premiums than those who ride safely.

This new policy was introduced by the Insurance Regulatory and Development Authority of India (IRDAI) in 2022, aiming to encourage riders to obey the traffic rules and reduce the number of accidents. Under the new policy, insurers are able to access a rider's traffic violation history from the National Crime Records Bureau (NCRB).

Insurers use this information to assess the risk associated with insuring a two-wheeler and determining the insurance premium. Road safety experts have welcomed the new policy. They believe that it will help reduce the number of accidents on Indian roads.

Effect on Bike Insurance Rates

The effect of traffic challans on insurance costs differs depending on the severity and frequency of traffic violations. These include overspeeding, jumping signals, or drunk driving. The higher number of violations, the more the rider is deemed as high-risk, resulting in increased insurance costs.

Insurers may even cancel or refrain from renewing a policy if you have too many traffic violations, leaving you with fewer coverage options, increased deductibles, and potentially increased premium prices from other insurers.

Here is some more information on how traffic fines are determined and how they can impact your bike insurance rates:

Here is some more information on how traffic fines are determined and how they can impact your bike insurance rates:

• The challan amount is based on the severity of the violation. For instance, a fine for speeding may be ₹500, while ₹2,000 or more for drunk driving.
• The penalties will also be affected by the rider's driving history. Riders with a higher number of traffic violations will typically incur higher penalties.
• The fine will be paid to the government and not to the insurer. However, the insurance provider may access this information to determine the premium cost.
• The effect of a traffic challan on insurance premiums can differ depending on the insurer. While some insurers may only slightly increase the premium, others may increase it significantly.

The Impact of Technology on Bike Insurance Costs

1.      GPS Devices and Telematics

• Insurers are increasingly using telematics to monitor riding behaviour. Devices installed in bikes track speed, braking, and overall riding patterns.
• Riders with safe habits receive discounts on premium amounts, while risky riders face increased premiums.

2.      Integration with Traffic Databases

• E-challan systems are integrated with insurer databases, which enables real-time updates on traffic violations.
• This data is used during policy renewal to adjust premiums dynamically.

Tips to Reduce Insurance Premiums After Traffic Violations

You can follow these simple tips to avoid your bike insurance premium price hikes:

• Adhering to Traffic Laws: Following all traffic rules is the most basic way to avoid your bike insurance premium hikes. This includes observing speed limits, respecting traffic signals, using turn signals, and refraining from drunk driving.
• Defensive Driving: You can enhance your driving skills and qualify for a discounted insurance premium by successfully completing a defensive driving course.
• Clean Driving History: Insurers often look at your driving record when determining your insurance premiums. A record with zero-to-no violations implies responsible driving behaviour, which lowers your chance of a hike on your insurance premium.
• Be Aware of Traffic and Speed Cameras: Being mindful of areas with automated cameras or the frequent presence of traffic police can help you avoid unintentional violations.
• Compare Bike Insurance Online: Before purchasing a policy, you can compare different quotes online on Policybazaar.com to find the best plan that matches your requirements and budget.

Conclusion

To maintain cost-effective insurance premiums alongside safe driving practices, you should prioritize preventive measures against traffic violations. Understanding how premiums change based on traffic violations can help you make better decisions about your premiums and ensure financial protection from unexpected road events.

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