In his letter last week, the lieutenant governor said this financial deterrent would encourage a better driving behaviour as there is an obvious co-relation between repeat traffic offences and the risk of accidents.
"I would, therefore, suggest that a layered insurance premium system based on the frequency and severity of traffic violations as recorded in MoRTH's VAHAN database may be introduced," reads the letter.
Insurance premium should be index-linked with the number of traffic violations recorded against a vehicle, which would have a salutary impact on road safety and traffic discipline, he said.
Citing a 2023 report of the Delhi Traffic Police, Saxena said that 60% of fatal road accidents involved vehicles that had previously been fined for traffic violations, primarily over-speeding and red-light jumping.
The vehicles with more than three traffic challans in a given year were found to have a disproportionately high involvement in severe accidents, he said.
Saxena also said that according to the Ministry of Road Transport and Highways (MoRTH), India recorded over 4.37 lakh road accidents in 2022, resulting in approximately 1.55 lakh fatalities.
Notably, over-speeding accounted for nearly 70% of these accidents, while violations such as red-light jumping contributed significantly to fatal accidents.
Analysis of accident data by the World Bank indicates that vehicles with multiple traffic violations have a 40% higher risk of being involved in fatal crashes compared to those with a clean driving record, he said.
Saxena has also urged the Union finance minister to engage the Insurance Regulatory and Development Authority of India (IRDAI) to take immediate action to establish a framework for index-linked insurance premiums.
The lieutenant governor has underlined in his letter that implementing such a system would not only align insurance costs with the actual risk posed by individual drivers but will also reduce the financial burden on insurers resulting from frequent claims.
This financial deterrent driven approach which is practised in the US and European countries would promote responsible driving behaviour, leading to a reduction in accidents, saving lives and ensuring more efficient management of insurance claims, he said.
"Such measures have been successfully implemented in other countries such as the United States, where insurance premiums increase significantly based on traffic violation and speeding tickets leading to an average premium increase of 20 to 30%. This also followed in several European Nations," reads the letter.
By implementing this policy, India can take a significant step towards creating safer roads, saving lives and ensuring a more sustainable transportation system for generations to come, the letter mentioned.
Meanwhile, an umbrella body of the RWAs said that the government should first focus on improving roads' condition before introducing such system.
"Before implementing a new system, the government should fix our roads and clear encroachments narrowing lanes. This will make our area more navigable, making future initiatives more successful," said Rajiv Kakria, the convener of Save Our City (SOC) south Delhi.
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