Good Drivers May Soon Pay Less: Gadkari Signals New Usage-Based Insurance Bill
Insurance Bill could bring usage-based motor insurance to India, linking premiums more closely to driving behaviour and rewarding safer drivers.
Insurance Bill could pave the way for usage-based motor insurance, allowing safer drivers to potentially pay lower premiums.
Insurance Bill: Union Minister for Road Transport and Highways Nitin Gadkari said on September 12 that the central government is working on a usage-based motor insurance system that could lower premiums for good drivers while increasing penalties for those who violate traffic norms or drive rashly. Gadkari made the remarks while speaking at the Global Fintech Fest 2026 in Mumbai, where he addressed a session on tolling and mobility finance.
According to Gadkari, the government is actively considering a usage-based insurance (UBI) framework under which drivers with a record of safe driving would be offered reduced insurance premiums, while penalties for those who violate rules or engage in rash driving could be made stricter. He said a new bill is being drafted keeping these proposed changes in mind, though he did not specify a timeline for its introduction or passage.
Insurance Bill: New Insurance Bill in the Works to Penalise Rash Driving
Gadkari said the proposed usage-based insurance model is intended to promote a culture of safer driving among motorists. He did not detail the specific parameters — such as telematics data, driving-behaviour scoring, or mileage-based metrics — that would determine premium calculations under the new system, nor did he specify which regulatory body would oversee implementation.
Insurance Bill: Road Accidents Remain a Concern: 5 Lakh Cases, 1.8 Lakh Deaths Annually
Speaking about road safety, Gadkari expressed concern over the scale of road accidents in India. He said approximately 5 lakh road accidents occur in the country every year, resulting in roughly 1.8 lakh deaths. Gadkari added that young people account for the largest share of these fatalities, with around 66 percent of those killed in road accidents falling in the 18-to-36 age group.
Insurance Bill: FASTag to Get Phone-Number-Style Portability with New “OneTag” Service
During the same address, Gadkari highlighted India’s digital public infrastructure, describing it as a strong foundation comprising UPI for payments, Aadhaar for identity verification, FASTag for mobility, and the VAHAN database for vehicle information. He said the next step is to integrate these digital capabilities into a single connected ecosystem to enable what he termed “intelligent mobility.”
Gadkari also announced the launch of a service called “OneTag,” described as a FASTag portability solution. Under this service, NETC FASTag users will reportedly be able to switch their linked bank without having to purchase a new FASTag — a process comparable to mobile number portability, where users retain their number while switching service providers. Gadkari said this would eliminate the current requirement for users to obtain a fresh FASTag when changing banks.
