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How Your Driving Record Affects Your Car Insurance Rates

By Michael Klazema on 9/28/2018

Your driving record is inextricably linked to your car insurance rates. Someone with a history of moving violations or more severe infractions poses a more significant risk to the company offering to insure the vehicle, leading to higher insurance rates. Someone who has never received a ticket is a lower risk and usually won’t have to pay as much for coverage.

How Insurance Companies Find out about Driving Infractions

Does this setup mean your rates will automatically go up every time you get a speeding ticket? Not necessarily. Car insurance companies, like employers, have to pay to see a summary of your motor vehicle record. Pulling these records repeatedly can be expensive, which means most insurers will only check your driving record now and then. Generally, insurers will always check your motor vehicle record when you apply for coverage. After that, checks tend to occur at semi-regular intervals, usually every 12 to 24 months.

To be safe, it’s best to assume your insurance company is going to look at your driving record every time you renew your policy. Insurers want to know if they should be charging you more for coverage or if they should be cutting you loose altogether. Checking your record for violations from the past year or two is the best way insurance companies can determine what level of risk you pose.

Age, Driving Records, and Insurance

Younger drivers are the exception to the renewal period driving record check rule. By default, a younger driver is considered a more significant risk than an older one. Younger drivers tend to acquire tickets and violations while becoming accustomed to the rules of the road. Because of these factors, insurance companies usually monitor younger drivers more closely. As a result, a younger driver is statistically more likely to see a rate increase for a speeding ticket or other minor violation than an older driver is.

That isn’t to say infractions can’t or won’t impact an older driver’s car insurance rates. First, even if car insurance companies don’t check your record every day, they will check it eventually. Your insurer may or may not raise your rates over a speeding ticket, especially if they learn about it 18 months after the fact. More serious infractions—like a reckless driving charge or a DUI conviction—will eventually factor into your car insurance rates, even if the insurance company doesn’t find out about them right away.

Second, it’s important to remember that some driving record infractions dovetail naturally with insurance claims. If you are found to be at-fault for an accident, or if you receive a ticket for your role in an accident, you or another driver will likely be making a claim on your insurance. Claims, like tickets, tell a car insurance company you are risky to insure. Claims and tickets together can spike your rates considerably or even result in an insurance company dropping your policy.

Look-Back Periods and Driver’s License Points

Your driving infractions won’t haunt you forever. Most insurance companies have a “look-back period,” either based on company policy or state law. An at-fault accident from ten years ago is not likely to affect your insurance rates because it doesn’t accurately represent your current responsibility as a driver. In most cases, insurance companies will only hold accidents, tickets, and other violations against you for three to five years. In some cases, the look-back period might be a little bit longer, but it’s rare for it to go past seven years.

Another element insurance companies might use when deciding your rates is the driver’s license point system. Many states use a system in which drivers accumulate “points” on their driving records as they receive new infractions.

Every state that uses a point system has a slightly different scale, but the concept is always the same. You get a certain number of points for each infraction you commit. In New York, for instance, you get three points for driving 10 miles per hour over the speed limit, five points for reckless driving, three for leaving the scene of an accident, and so on. If you accumulate 11 points in an 18-month period, the DMV suspends your license. Points drop off your record after 18 months. Looking at license points can give insurance companies a snapshot of your recent driving habits, which can be useful for assessing risk level and deciding coverage and rates.

In some cases, you may be able to get points erased from your driving record or make sure they don’t get reported to insurance companies. Going through a state-sanctioned traffic safety course is the most common way to prevent a traffic ticket from affecting your insurance rates. Keeping your point total as low as possible is always recommended, not just because it might save you money on insurance but because it will help keep you from a license suspension.

How Violations Will Affect Your Car Insurance Rates

How much a traffic violation affects your car insurance rates will vary depending on the severity of the infraction and the status of your driving record otherwise. Here are a few types of violations and the average rate increases they cause for car insurance premiums, based on data from CarInsurance.com:

  • Not wearing a seatbelt: 3 percent
  • Texting while driving: 16 percent
  • Speeding ticket 1-15 miles per hour over the speed limit: 20 percent
  • First-offense DUI or DWI: 79 percent
  • Hit-and-run resulting in an injury: 87 percent
  • At-fault accident resulting in property damage over $2,000: 110 percent

These numbers are just averages, but they provide a guide to how significantly your driving habits might impact your insurance rates.

Conclusion

Your motor vehicle record is an essential bit of history to consider when applying for car insurance. Make sure you know what your record looks like by performing a self-check through backgroundchecks.com. Learn more about driving records by visiting our FAQ section on the subject.

 

Sources:
https://www.investopedia.com/ask/answers/091815/can-your-car-insurance-company-check-your-driving-record.asp

https://www.cnbc.com/id/100476549

https://www.carinsurance.com/auto-insurance-and-driving-record.aspx

https://dmv.ny.gov/tickets/about-nys-driver-point-system


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