Many people know that your driving record can affect your car insurance premiums, but there is a difference between your official driving record and what insurance companies consider when calculating rates. If your state uses a driver’s license points system, insurance companies may take those points into consideration when setting your rate. This overview of Bankrate explains driver’s license points, the consequences of receiving points and how they may affect your insurance.
What are the driving license points?
Many countries use point systems to track driving offenses and to determine the severity of various accidents. You may get points on your driver’s license after a speeding offense or other moving offense, such as running a red light. Many states will suspend your license if you receive a certain number of points. Which offenses get points, the number of points for each, and the number allowed before a license is suspended varies by state.
For example, a speeding ticket in New York can result in three to 11 points, depending on how many miles per hour you were over the speed limit. Reckless driving and texting while driving may earn you five points, while failure to signal may result in two points.
How do points affect your insurance rate?
Insurance companies evaluate your driving record when setting your rates, and this may include looking at your driver’s license points if your state uses a points system. Insurance companies typically charge higher rates for accidents that may also earn driver’s license points, such as speeding, distracted driving, reckless driving, and driving under the influence.
Although they are sometimes referred to as “insurance points,” the systems insurance companies use to track driving violations are usually more accurate than a simple point system and may vary widely by carrier. While one carrier may significantly raise rates on renewal for a driver with a recent speeding ticket, another company may have higher rates for drivers who text and drive. Even if your state does not use a driver’s license points system, you will likely still see an additional cost when renewing your policy for driving violations.
Having points on your driver’s license will also affect your car insurance rates if you decide to switch carriers or get new car insurance. Car insurance companies will likely ask about your driving record during the quote process and before agreeing to offer you coverage.
Other consequences of driver’s license points
Each state has its own rules regarding licensing points. However, if you get too many points in a set time frame, your license may be suspended or revoked. For example, your New York license may be suspended if you score 11 or more points in an 18-month period.
If your license is suspended, insurance companies will likely view you as a high-risk driver. You may be required to have SR-22 insurance. The SR-22 is a form a driver may be required to provide to the state to verify that they meet minimum mandatory auto liability requirements in your state. The SR-22 is usually required for drivers who have had their license suspended and want it reinstated.
Carriers may also cancel or not renew your policy as a result of driving violations or license suspensions.
Can I get rid of points on my licence?
States may have different policies surrounding licensing points. Points may be taken off your license over time, or you may be able to remove them by taking an approved defensive driving course or attending traffic school. If you have points on your license, you may want to check with your state’s Department of Motor Vehicles about their policies regarding removing points. However, while points may be removed from your licence, your offenses are still part of your permanent driving record.
Even if a point is removed from your licence, an offense related to that point may still be considered by your auto insurance company. However, insurance companies usually consider three- to five-year driving offenses when setting rates, depending on the carrier and the offense. Serious infractions, such as a DUI, may be considered for a longer period.
How can I lower my insurance rates?
If your car insurance rates have gone up because of the points accumulated on your driver’s license, there may be ways you can lower your rates. Here are some ways you can lower your rates:
Take a driving lesson: In select states, insurance companies may offer a discount for taking an approved defensive driving course or driver education course.
Take advantage of other discounts: Most auto insurance companies offer a number of discounts to eligible drivers. Choosing an airline with many discounts in effect may help you save. Common deductions include consolidation, pay in full and good student.
Shop for a new policy: If you’ve done all you can with your current insurance policy and your insurance isn’t declining, you might consider comparing quotes from other carriers to see if another company is offering you a lower rate for your circumstances and coverage needs.
Improve your credit: Not all states allow credit to be used as an insurance rating factor, but in states that do, improving your credit may lower your car insurance rates. Carriers usually see drivers with poor credit as riskier to insure and usually raise rates for those drivers as a result.
Increase your deductions: If you’re still having trouble finding a reasonable rate, you may consider increasing your discounts. Higher deductibles may lower your premium, but keep in mind that you will have to pay higher out-of-pocket costs if you claim.
Frequently Asked Questions
In states that use point systems, points may be added to your driver’s license for driving offenses such as speeding, distracted driving and reckless driving. Many states may suspend or revoke your license if you receive a certain number of points over a period of time. Although they are sometimes called “insurance scores” because they take into account your driving record, the insurance systems that insurers use to set rates may differ between carriers. The effect of various violations on your license points may not be in line with the effect of the violation on your insurance rates. Insurance companies do not have the authority to suspend your license; However, unsafe or reckless driving may be used by the insurance company to justify an increased premium or not renewing.
Deductible types and amounts vary by insurance company, and eligibility requirements may also vary. For example, one carrier might offer a 10 percent savings for bundling, while another might offer 25 percent.
The average cost of car insurance in the United States is $2,014 per year for full coverage and $622 per year for minimum coverage. However, your rates may vary widely based on personal ranking factors such as your location, type of vehicle, driving history, and in some states, your age, gender, and credit history.