How Your Driving Record Influences Auto Insurance Premiums
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Your driving record impacts the cost of your auto insurance premiums, for better or worse. Insurance companies pay close attention to every detail of your driving history. Even if you’re involved in a small fender bender or receive a minor traffic violation, these incidents directly influence how much you’ll pay for coverage, potentially significantly increasing your premiums.
Understanding how these elements influence your insurance costs can help you make informed decisions about how to manage your premiums, especially if your driving record isn’t exactly stellar. We’ll break down the specific factors within your driving record that can influence your insurance rates and provide insightful tips on how to minimize their impact on your premiums.
Speeding Tickets and Traffic Violations: A Fast Track to Higher Rates
Speeding may get you where you’re going in less time, but if you get caught, a ticket can cost you more than just a fine. Speeding tickets and other traffic-related violations wave a bright red flag to insurance companies, signaling risky behavior on the road. Here’s how they can lead to higher insurance rates and what you can do to reduce their impact on your insurance premium.
Speeding Ticket Frequency and Severity
The more speeding tickets you accumulate and the faster you were going over the speed limit, the higher the risk you pose to yourself and other drivers on the road. Insurance companies view repeat offenders as higher risks to insure, so be mindful of your speed on the road – it’ll save you money and keep yourself and others safe while on the road.
The Impact of Other Traffic Violations
Other tickets related to reckless driving, such as weaving in and out of traffic and tailgating, can also raise your insurance rates. Additionally, insurance companies will increase your premium for running a stop sign or a red light. They regard these violations as a sign of disregard for traffic laws, which can result in accidents and injuries.
Also, failing to wear your seat belt is not only illegal but also incredibly risky. Insurance companies often associate seat belt violations with a higher likelihood of injuries in case of an accident. So, even if you don’t think it’s a big deal, having seat belt violations on your record could lead to a rate increase.
Accidents and Claims: The Costly Consequences
Being at fault in an accident can also lead to a substantial increase in your insurance premiums. Insurance companies consider at-fault accidents as a sign of risky driving behavior, and as a result, they may raise your rates to compensate for the higher likelihood of future claims.
Here’s what you need to know if you were recently involved in an accident:
At-Fault vs. No-Fault
At-fault accidents usually lead to higher rate increases compared to no-fault ones. In an at-fault state, when an accident occurs, the insurance companies of both parties carefully review all the details to determine who should be held responsible for the incident.
If you find yourself in the unfortunate position of being the at-fault driver, your auto insurance will likely cover the property damage, medical bills, and possibly even compensation for other damages like pain and suffering. Your insurance rate is likely to go up as a result, unless your insurer offers some kind of accident forgiveness program.
Claim Frequency
Having multiple claims within a short period, even if they are not your fault, can signal to insurers that you pose a higher risk as a driver. This increased perceived risk often leads to an increase in your premiums. Insurers may view frequent claimants as more likely to continue filing claims in the future, which means they may have to pay out more in benefits.
The Severity of Your Accident
Insurance companies pay close attention to the amount of damage caused. Accidents that result in significant damage are considered more serious than those with small payouts. So, if you’ve been involved in accidents that have cost a lot to repair or resulted in major property damage, insurance companies may see you as a higher risk and adjust your premiums accordingly.
Your Options After an Accident
After an accident, it’s natural to worry about the impact on your auto insurance premiums. One option to explore is whether your policy includes accident forgiveness. This can be a lifesaver, as it can prevent your rates from skyrocketing after your first accident.
On average, car insurance premiums go up by almost 50% after an accident. Even if you’re not at fault in an accident, your rates can still increase by an average of 4%. However, your rate won’t increase until you renew your policy, so you might have some time before feeling the impact to shop for affordable car insurance rates post-accident.
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DUI/DWI Convictions: A Serious Offense with Serious Costs
Driving under the influence of alcohol or drugs is a serious offense that can have severe consequences, including a significant increase in auto insurance rates. A DUI or DWI conviction indicates to insurance companies that you are a high-risk driver, which will likely result in a substantial premium hike.
If you’re convicted, you can expect the following impacts to your insurance rates:
- Significant Rate Increases: DUI/DWI convictions typically result in the highest rate increases compared to other driving offenses.
- Non-Renewal: Some insurers may choose to not renew your policy at all if you receive a DUI/DWI conviction.
- Long-term Impact: These offenses can affect your insurance rates for several years after conviction. Insurance providers often keep these offenses on your record for an on average three to five year period, meaning you’ll be stuck with those inflated premiums for quite some time.
How to Improve Your Driving Record and Lower Your Auto Insurance Premiums
Maintaining a clean driving record is the best way to ensure lower auto insurance rates. However, if you were caught speeding, in an accident, or received a DUI, don’t lose hope just yet. Some insurers offer ways to lessen the impact of these violations on your premium.
Here are some proactive steps you can take to potentially mitigate the rate increase:
- Take a defensive driving course. Some insurance companies offer discounts to drivers who complete a defensive driving course. These courses can help improve your driving skills and demonstrate to your insurer that you are committed to safe driving practices.
- Conduct regular record reviews of your driving record. Check periodically to ensure there are no mistakes that could be unfairly inflating your premiums. Go through your local DMV. Many states offer the option to request your record online, or you can visit your DMV office in person. To obtain your driving record, you’ll typically need to complete a form, provide proof of insurance, and pay a fee. Keep in mind, speeding tickets, DUIs, and accidents stay on your driving record for about three to five years.
- Agree to monitoring programs. Some insurance companies will offer discounts of up to 30% for drivers who enroll in their monitoring program and drive safely. To participate, a device is attached to your vehicle, or an app on your phone monitors things like speed vs. posted speed and sudden braking to provide a discount.
- Seek legal assistance. If you receive a ticket or violation that you believe was issued unfairly, consider consulting with a traffic attorney to explore your options for challenging the citation. A successful appeal could prevent points from being added to your driving record, thereby avoiding a potential increase in your insurance premiums.
- Shop around for competitive quotes. Different insurance companies weigh speeding tickets and traffic violations differently when setting premiums. By comparing quotes from multiple insurers, you may find a provider that offers more favorable rates for drivers with a less-than-perfect driving record.
- Start driving safely and responsibly going forward. Obeying traffic laws and driving responsibly at all times avoids tickets and violations. In the future, commit to following speed limits, using turn signals, and avoiding distractions while behind the wheel.
The Bottom Line on Steering Clear of High Premiums
