How violations affect your car insurance rates

By Jim Sloan Posted : 08/31/2010

Violations can affect your ratesHey, we all make mistakes. But our car insurance companies will make us pay for certain mistakes more than others. Here's a rundown of how much a driving mistake could cost you.

Speeding tickets

While a single speeding ticket may not cause your car insurance rates to go up, two in a row probably will. In fact, if you get two speeding tickets and your car insurance company finds out, it's possible it could even decide you are no longer worth the risk and will drop your coverage at renewal time.

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DUI

"A DUI has a huge impact on a driver for numerous reasons," says Tully Lehman of the Insurance Information Network of California.

If you are convicted of a DUI or DWI, your car insurance company can increase your rates for up to three years, Lehman says. Worse, the DUI stays on your driving record for 10 years, preventing you from qualifying for a good driver discount.

New drivers with violations

Lehman notes that the ramifications of a poor driving record vary by state, insurer and the individual. "If you are a young driver with limited time behind the wheel and rack up a couple citations in a short period, you would likely be seen as a greater risk than a driver who has 20 years behind the wheel with a perfect driving record who received citations for similar violations," Lehman explains.

New auto insurance customers

Lynn Knauf, an insurance expert formerly with the Property Casualty Insurers Association of America and now an analyst at Lobert Legislative & Regulatory Consulting, agreed that it's very difficult to generalize about how mistakes will affect your car insurance rates -- it varies by insurer and state. Generally speaking, she says, violations like speeding tickets will have a greater effect on your car insurance rates if you are shopping around for a policy than if you plan to stay with your current insurer.

"[Car insurance] companies don't always check to see if their existing customers have had tickets in the last year," Knauf says. "It's enormously expensive to check all your customers annually."

At-fault accidents

The insurance company's experience with you may also influence how they treat an at-fault accident claim. Accident surcharges vary from 20 to 40 percent after the first accident. These surcharges aren't penalties, Knauf says, but rather premium hikes that reflect the increased risk that you will file another claim in the future.

But, she adds, some car insurance companies have "accident forgiveness" policies and will waive accident surcharges for long-time customers.

Out-of-state traffic violations

That speeding ticket you got in Indiana during your cross-country trip may combine with your hometown speeding ticket to increase your insurance premium. Then again, it might not. Lehman says some insurers check only in-state records for violations when assessing your DMV history. But others do a national search.

That, Knauf says, is because most states have agreed to share that kind of information through what's called a "Non-Resident Violators Compact." Minnesota and Wisconsin are the only states not participating in the compact, so chances are that a ticket from Indiana will show up on your record.

Traffic school can "mask" a violation . . . but with limits

States like California have ordered auto insurance companies to rely primarily on a driver's record when setting their car insurance rates, and a second citation could result in a higher premium. But Lehman notes that some drivers opt to attend traffic school rather than having the ticket appear on their records. The process is called ticket masking, Lehman says, because it removes a point from the driver's record.

But you can only go to traffic school once every 18 months, says Lehman. So if you get another moving violation within that 18 months -- such as a ticket for speeding or following too closely -- and your insurance company finds out, your car insurance rates will likely go up.

"Bottom line is that if you received two points visible to your insurer, then it is likely your rates will be changing," he says. "In some instances, depending on what the violations are for, some insurers may decide that they won't cover you anymore."

Don't sweat parking tickets

Not all tickets will impact on your car insurance rates. Although talking on a cell phone while driving is against the law in some states now, a ticket for that offense likely won't affect your car insurance rates. The same is true for parking tickets: Your insurance company doesn't care if the meter expired while you were shopping downtown.


Jim Sloan is a freelance writer in Reno, Nev.

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