The introduction of the electronic traffic-violation system, commonly known as the e-challan, has rapidly spread across India in recent years. Studies suggest that approximately 18.24 million e-challans were issued between 2019 and 2023, resulting in ₹1.26 trillion in revenue. Thus, with gradual technological advancement, the traffic enforcement system has reduced the need for the traditional manual system.
The majority of insurers nowadays include traffic violation data in a driver’s driving history. Continue reading this blog to learn more about how e-challan is gradually expanding in India.
What is the Relation between Traffic Challans and Insurance Premiums?
If there is any traffic violation and a challan is issued, it gets recorded in the driving history. The majority of insurance companies consider this information when assessing the risk of the insured vehicle and determining the premium amount.
However, frequent traffic violations increase the risk, often resulting in higher insurance premiums. Drivers with a history of frequent violations are high-risk policyholders and may need to pay higher premiums.
Consider this example. A driver in Maharashtra with three separate Maharashtra traffic challan in a year, suppose for signal jumping, drinking and driving, overspeeding, will be categorised as a high-risk individual. Thus, while renewing car insurance, the insurance company might raise the premium amount or reduce the discount that would otherwise be applied for a clean record.
How to Prevent an Increase in Premium Payments Due to Traffic Challans?
To avoid paying a higher premium due to a traffic challan, drive safely and adhere to all traffic regulations. Moreover, following traffic rules, using seatbelts, and avoiding drinking can help maintain a clean driving record. With this, motorists can also reduce the risk of traffic violations and the associated high premiums.
Additionally, enrolling in driving courses can help you avoid traffic violations and challans. These courses help foster a commitment to safe driving and allow drivers to earn discounts from insurance companies.
What is the Impact of E-challan on Driver Risk Scores?
E-challans play a major role in shaping a driver’s overall risk profile. Every recorded violation becomes part of the digital driving history, which insurers actively review. Using an online challan check helps drivers stay updated and avoid unnecessary penalties. Here’s how e-challans impact risk scores:
– Multiple Violations Increase Risk: Repeated offences signal unsafe driving behaviour, pushing the driver into a high-risk category.
– Non-Payment Can Escalate Consequences: Ignoring e-challans for extended periods may result in higher insurance premiums, registration issues, or even licence suspension.
– Severity Matters: Major offences, overspeeding, rash driving, signal jumping, affect the risk score more than minor violations like parking errors.
– Influence on Insurance Terms: A poor risk score can limit insurance options, increase deductibles, and reduce eligibility for discounts.
– Timely Payments Improve Scores: Clearing dues promptly via an online challan check helps maintain a clean driving record and can lead to lower future premiums.
Benefits of Linking E-Challan with Insurance
Find out the key benefits of linking e-challan with insurance:
1) Real Time Driver Behaviour Data
By properly integrating e-challans with insurance data, insurance companies can treat drivers’ violations as an appropriate proxy for risk. This helps in more accurate premium costs.
2) Encourages Smooth Payment Process
When policyholders know that insurers can check unpaid challans via the “online challan check” portals, they are more likely to settle fines. Maintaining a clean record helps in a smooth renewal.
3) Rewards Discounts to Drivers
Drivers with a clean driving history are low-risk individuals. They also qualify for additional bonus benefits and low premium payments.
4) Reduces Fraudulent Claims
After analysis of data violations, insurers can choose to eliminate drivers with a history of repeated violations. With this, safe drivers gain an additional advantage.
5) No-Claim Recognition
Insurers with a close link to e-challan data can cross-check violation data against claim-filing history. A driver with fewer or no violations tends to avail of better terms and conditions.
6) Promotes Transparency
The online challan check portals allow both insurers and drivers to review violation-related data. This results in reduced disputes and errors in determining premium costs.
Bottom Line
With the e-challan system now incorporated into India’s traffic enforcement infrastructure, its impact on insurance is rapidly increasing. A driver’s violation history can affect both premiums and risk scores. Drivers maintaining a clean driving record benefit significantly from reduced premiums and high discounts.
Conversely, pending payment of e-challans poses a high risk and can lead to costly insurance. Thus, after on-time payment, you can stay updated on challan status and contribute further to a smooth, safe journey while travelling on Indian roads.
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