Insurance Surcharge Convictions: What's The Cost?

A car insurance surcharge is an additional fee added to your premium, usually as a result of a ticket or at-fault accident. This can also be caused by late payments, coverage lapses, or adding a new vehicle. The surcharge is meant to cover the additional cost or risk of insuring a driver with a poor driving record. The severity of the violation will determine the severity of the surcharge. For example, a DUI conviction will result in a higher surcharge than a speeding ticket. Surcharges can be temporary or permanent, depending on the state, insurer, and cause.

Speeding tickets

The impact of a speeding ticket on your insurance premium can be significant. In California, for example, drivers with clean records pay an average of $2,633 per year for full coverage, but this increases to $3,625 after a speeding ticket—a 38% hike. The national average increase is 24%, or about $380 more per year. The severity of the surcharge will depend on the number of miles you were speeding over the limit, with higher speeds resulting in larger surcharges.

The good news is that speeding ticket surcharges don't last forever. They typically remain in effect for three to five years, depending on the state and individual insurance company guidelines. Some companies and state laws will reduce the surcharge amount each year you drive without another incident.

To mitigate the impact of a speeding ticket on your insurance, you can consider taking a safe driving course, asking your insurance provider about available discounts, or shopping around for a new insurance provider. Additionally, committing to safe driving practices and maintaining a clean driving record over time can help reduce your risk profile and potentially lower your premiums.

DUI convictions

A DUI conviction is a red flag for insurance companies. Insurers consider a DUI conviction a sign of increased risk, making the driver more likely to be involved in accidents or violations in the future. As a result, they adjust insurance premiums to reflect this higher risk.

The exact increase in premiums will vary depending on several factors, such as the insurance company, the driver's history, the details of the DUI conviction, and any previous offences. However, it is common for premiums to rise by several hundred dollars per year or more. This increase can be a considerable financial burden, especially if the driver is already dealing with legal fees and other DUI-related expenses.

In addition to increased premiums, a DUI conviction typically triggers the requirement for an SR-22 filing, which is a certificate of financial responsibility that verifies the driver has the minimum liability insurance coverage required by the state. The SR-22 requirement adds an extra layer of administrative burden and expense, and it usually remains in effect for three years from the date of the DUI conviction.

After a DUI conviction, insurance companies may cancel or choose not to renew a policy. In Ontario, Canada, for example, insurance laws allow insurers to cancel policies and deny renewals when there is a material change to a driver's risk profile. These laws deem impaired driving as risky and classify those convicted of DUI and other serious traffic offences as "high-risk drivers." While provincial laws allow individual companies to cancel motor vehicle insurance coverage of high-risk drivers, the industry as a whole is required by law to provide all drivers with basic insurance coverage.

High-risk drivers can obtain insurance, but it is typically offered at a much higher price. Several insurance companies specialise in insuring high-risk drivers and charge exorbitant premiums for their services. In Ontario, all insurance companies belong to the Facility Association, an insurance pool that provides auto insurance to high-risk drivers as a last resort.

The best way to avoid high insurance rates after a DUI conviction is to never drive while impaired. However, if you are facing a criminal trial for DUI charges, it is advisable to speak to a skilled criminal defence lawyer before pleading guilty. While there may be concerns about the cost of hiring a lawyer, a criminal DUI conviction will have a much bigger impact on your finances.

Missed insurance payments

If you do nothing to rectify a missed payment, you could face late or failed payment fees, and if you default on several payments, you may end up paying more in administration costs. Your insurance provider can also cancel your policy due to non-payment, leaving you without insurance for your car. This means you will be unable to drive your vehicle legally. Missed payments can also negatively impact your credit score, as they can remain on your credit report for up to six years, making it more difficult to obtain loans, credit cards, or mortgages in the future.

To prevent missed payments, consider setting up direct debit payments or requesting that your insurance provider send you text or email reminders. You can also arrange to receive alerts from your bank. If you are unable to make a payment, contact your insurance provider immediately to discuss alternative payment dates or arrangements.

In summary, missed insurance payments can result in late fees, increased administration costs, policy cancellation, and a negative impact on your credit score. It is essential to stay on top of your insurance payments and to communicate with your insurance provider if you anticipate any payment issues.

At-fault accidents

An auto insurance surcharge is a fee added to your insurance premium, which is usually the result of a ticket or at-fault accident. This surcharge is applied when a driver is found to be at fault in an accident, and it is intended to cover the additional cost and risk of insuring a driver with a poor driving record. The surcharge will vary depending on the insurance company and the severity of the accident. For example, an at-fault accident where you total another person's car will likely result in a higher surcharge than a minor fender-bender.

In the state of New York, if you are found to be at fault in an accident that results in bodily injury or death, or property damage exceeding $2,000, you will be subject to a surcharge on your insurance premium. The surcharge could be as high as 40% of your premium, and you may also lose any safe driver discounts you previously qualified for.

In Massachusetts, a surcharge is applied if the driver is found to be more than 50% at fault and the accident claim exceeds $1,000 for damage to someone else's property, a collision with another driver, or bodily injury to others. This is known as a "chargeable accident" and will result in an increase in your insurance premium.

It is important to note that surcharges are not permanent and will only affect your rates for a limited number of years, typically three to seven years. Additionally, some insurance companies offer ""accident forgiveness", where they may waive the surcharge for your first accident or for accidents that occur after a certain number of years of safe driving.

To avoid surcharges, it is important to practice safe driving habits, maintain a good driving record, and make timely insurance payments to avoid coverage lapses.

Running a red light

The number of points you receive for running a red light varies by state. In Illinois, for example, a red light conviction adds 20 demerit points to your driving record, while in Texas, two points are added unless the violation results in an accident, in which case three points are added. In Florida, four points are added per infraction. In some states, you could have your license suspended if you gain enough points within a certain time frame.

If you are caught running a red light by a red light camera, you may not face the same rate increases as you would if you were pulled over by a police officer. This is because many states treat automated red light camera tickets like speed camera tickets, rather than more serious traffic violations. If you live in one of these states, your insurance company may elect to ignore the ticket and your rate will stay the same.

However, if you are caught running a red light by a police officer, this is considered a moving violation and will be treated as such by your insurance company.

If you have a red light ticket on your record, there are a few ways to try to prevent a rate increase. If you have a valid reason, you can challenge the ticket and try to get the conviction reversed. If the judge agrees, you may have the points on your record reduced or removed entirely. You can also take a defensive driving course to remove demerits from your license.

Demerits on your driving record won't affect your insurance rate forever. Your insurance company will usually excuse offenses that are at least 3-5 years old.

Frequently asked questions