How Vehicle Insurance Supports Road Safety Policies

Due to increasing vehicles, road network expansion, and faster average speeds, accident rates have increased worldwide. These incidents sting the heart, but they also affect the country's GDP. On acknowledging this fact, the Ministry of Road Transport & Highways (MoRTH) suggests the importance given to vehicle insurance. Vehicle insurance provides financial security and stands as a cause for road safety.

New-age insurers like ACKO Insurance are also contributing to this shift by offering digital-first policies that align with evolving road safety norms. So, read below to know how vehicle insurance contributes to road safety policies.
Significance of Car Insurance in India.

In India, automobile insurance is a significant force for road safety, regulatory compliance, and financial security. The insurance grinds down financial burdens after an accident, in terms of personal injury, third-party liability, and damages to personal property. 

Insurance specifies responsible vehicle ownership and upholds safer means amid escalating numbers of vehicles and traffic accidents. Besides, insurance is also useful in supporting government road safety activity and is mandated under the Motor Vehicles Act.

Role of Vehicle Insurance in Road Safety
The following are the ways in which vehicle insurance plays a crucial role in road safety:
1.    Mandatory Motor Insurance Enforces Compliance
The Motor Vehicles Act of 1988 has made third-party insurance compulsory for motor owners in India. This law ensures that: 
●    Road accident victims are financially protected.
●    Vehicle owners and drivers are accountable while driving.
●    All kinds of uninsured and unregistered vehicles are banned.

Besides encouraging responsible ownership, the law also indirectly fosters the ideas of roadworthiness by mandating insurance. 

2.    Risk-Based Premiums Promote Safer Driving

In India, insurance companies utilise various risk assessment techniques to calculate premiums. In this context, factors like the type of vehicle, driving history, location, and previous claims have a significant influence. This motivates :
●    Motor owners to properly maintain their vehicles so that they can avoid claims.
●    Drivers drive carefully to maintain a substantial no-claim bonus (NCB).
●    To avoid drunk driving, overspeeding, or activities that bear high risks.

3.    Accident Data from Claims Assists in Policy Making

Collecting massive volumes of real-time data related to accidents and claims is part of the insurer's research work. This data provides insights such as:
●    What are the common causes of accidents
●    Which regions are accident-prone 
●    Age demographics of drivers who are involved in accidents
●    Types of vehicles that cause road mishaps 

NGOs and Government bodies utilise these data to design better traffic policies, target enforcement efforts and develop infrastructure improvements that include better lighting, increased number of speed breakers at high-risk regions and so on. 

4.    Faster Compensation through Insurance Reduces Legal Burdens

Earlier, accident victims had to wait for a long time before they could receive any compensation since the legal proceedings used to take a long time to get over. However, comprehensive motor insurance has now made claim settlement smoother and faster, which:
●    Has eased the burden on Indian courts 
●    Enables accident victims to get timely medical aid and support
●    Motivates more people to report accidents and abide by legal protocols

Such efficiency has strengthened public trust in the system and has promoted a culture of accountability and transparency on the roads.

5.    Coverage for Vehicle Damage Encourages Safety Features
Comprehensive motor insurance allows insurers to provide discounts for installing different safety features, such as:
●    GPS-based anti-theft devices
●    Anti-lock Braking Systems (ABS)
●    Dash Cams
●    Speed governors

These features decrease the chances of accident risk, damage, and theft, aligning well with the government's road safety initiatives, like mandatory Anti-lock Brake Systems for two-wheelers.

6.    Telematics and Usage-Based Insurance Foster Responsible Driving
The rise of InsurTech in India has enabled many insurance companies to offer usage-based insurance (UBI) models after collecting data from telematics. These models track driving behaviour, including:
●    Speeding patterns of drivers
●    Braking and acceleration tendencies
●    Vehicle usage time (e.g. night driving)
Drivers who exhibit safer driving behaviour receive lower premiums, whereas risky drivers get penalised. 

7.    Third-Party Liability Insurance for Commercial Vehicles
Road accidents in India most often involve commercial vehicles like buses, trucks, and taxis. The mandatory third-party liability insurance allows accident victims to receive the following:
●    Financial compensation in case of accident or unfortunate death 
●    Legal support 

These mandatory coverage makes it a point that social and financial protection for road accident victims is sufficient and has a broader goal of reducing fatalities.

Final Words
Not a mere legal requirement in India, vehicle insurance is a tool at the disposal of the country in the quest to enhance road safety. It is central to road safety, be it enforcement, encouragement for responsible driving, support and protection to victims, or providing information for policy formulation. Therefore, before you hit the road with your vehicle, check and make sure you have vehicle insurance and observe all road safety regulations.