How Does Your Driving Record Affect Your Insurance Premiums?
Opinions on how accidents and tickets affect your auto insurance premiums are rampant. Not all you’ve heard is necessarily true. Granted, your driving record may affect how much you pay for auto insurance but not every infringement counts.
To dispel the myths, I did some research to find out how insurance companies regard tickets and auto accidents when it comes to your insurance premiums. You might be surprised to find out that, in some instances, a traffic fine or accident may have absolutely no impact on how much you pay for auto insurance.
While circumstances differ from one insurance company to the next, there are some generally accepted practices. Most insurers will not increase your premiums by much for some types of traffic tickets or accidents. It depends mostly on the nature of the traffic offense or how much you were at fault in an accident.
Traffic Tickets
Traffic tickets for minor offenses should not cause your insurance premiums to increase. At least, not by much. A speeding ticket, when traveling only about 5 miles per hour over the limit, should not cause your insurance to increase by much, if at all. If it is your first speeding ticket, many insurance companies will ignore it entirely. A ticket for an expired license tag should be similar. The first time, you may be let off the hook or only see a slight increase in your premiums.
Even for minor offenses, like those mentioned, repeat offenders will face consequences. Typically, insurance premiums will increase exponentially with every additional traffic ticket. For the first ticket, you might only see an increase of 10%. The following might increase your premiums by 20%, then 30%.
The severity of the traffic violation has a serious effect on how your insurer views your premium and, in some cases they may even refuse to insure you. A traffic ticket for traveling 25 MPH above the limit will obviously be taken much more seriously than a ticket for 5 MPH over the limit. If you commit a criminal offense, your insurer will also take this much more seriously.
Most traffic tickets remain on your DMV record for about three years. This is not the same in all states though. In Virginia, for example, a ticket will remain on your record for 5-years.
Accidents
The most important factor affecting your insurance premiums following an accident is whether you were at fault or not. In many cases, the fault is allocated by means as a percentage. This means that if you are 50% at fault, you and the other driver share responsibility for the accident equally.
Generally, if you are 50% at fault (or more), you should expect a proportional increase in your insurance premiums.
An insurance company might consider the amount paid in damages before increasing your premiums. In an accident where you are at fault, but the damage is less than $500, some insurers may not increase your premiums by much or not at all.
Some insurance companies offer a policy that exempts you from a premium increase after the first accident. You will need to check with your insurance company if they offer this type of policy.
The Bottom Line
While you may be forgiven for some tickets or accidents, it will eventually count against you. The best way of preventing auto insurance increases is to always drive responsibly. Driving safely reduces the chances that you will claim on your insurance.
Insurance companies obviously appreciate people who don’t claim too often and may even offer rewards for no claims over a certain period.