Understanding Auto Insurance: 02 Conviction Point Surcharge

An auto insurance surcharge is a fee added to your premium, usually as a result of a ticket, an at-fault accident, or a missed payment. The surcharge is meant to cover the additional cost or risk of insuring a driver with a poor driving record. The surcharge can be temporary or permanent, depending on the state, insurer, and cause. The number of points assigned to a surchargeable incident depends on the incident classification, with minor traffic law violations receiving 2 points and major traffic law violations receiving 5 points. These points can lead to increased insurance premiums or even a suspended license. Understanding surcharge schedules and driving safely can help prevent insurance surcharges.

What is an auto insurance surcharge?

An auto insurance surcharge is a fee added to your insurance premium. This is usually the result of a ticket or an at-fault accident, but late payments, coverage lapses, or adding a new vehicle may also result in a surcharge.

Surchargeable offences include being at fault for an accident (such as rear-ending another driver) or receiving a ticket for speeding, traffic violations, or a DUI. These events are used by insurers as indicators of the increased risk of insuring the driver, as they may cause more claims or losses in the future. The types of accidents or violations considered chargeable vary by state and insurance company.

The surcharge fee applied to your auto policy will raise your premium payments moving forward. The exact amount you can expect to pay after a surcharge will depend on your insurance company and the severity of the event. For example, an at-fault accident where you total another person's car might result in a higher surcharge than a minor fender-bender.

The length of a surcharge can depend on the insurance provider, state, and cause of the surcharge. In Massachusetts, drivers can expect surcharges to last three to six years before they are removed, depending on the specific incident. In other states, such as Pennsylvania, minor violations do not incur surcharges, and only major traffic offences are surcharged.

Drivers should note that it is possible to receive multiple surcharges on a policy at once. If you are involved in another at-fault accident or surchargeable offence, this will result in a greater impact on your premium.

How long does an auto insurance surcharge last?

The length of time an auto insurance surcharge is applied to your policy will depend on several factors, including the insurance provider, the state, and the cause of the surcharge. Typically, a surcharge will last for three to five years, but in some cases, it can be temporary or permanent.

The duration of a surcharge can vary depending on the specific circumstances and the policies of your insurance provider. For example, in Massachusetts, surcharges typically last three to six years before being removed, depending on the incident.

It's important to note that you may receive multiple surcharges on your policy at once. If you are involved in another at-fault accident or surchargeable offense, you will face additional surcharges, resulting in a greater impact on your premium.

Most insurance companies will increase your premium after an accident you cause, which is known as surcharging. This practice varies by company and state, with some states only allowing insurance companies to surcharge at-fault accidents, while others give discretion to surcharge any accident.

The surcharge will appear as an additional charge on your billing statement, often as a percentage of your premium, when you renew your policy after the chargeable accident. The amount of the surcharge will depend on the insurance company and the severity of the event, with more severe accidents resulting in higher surcharges.

How to avoid auto insurance surcharges

An auto insurance surcharge is a fee added to your insurance premium, usually as a result of a ticket, an at-fault accident, late payments, coverage lapses, or even adding a vehicle. These surcharges are meant to cover the additional cost or risk of insuring a driver with a poor driving record.

• Practice safe driving: The best way to avoid surcharges is to adopt safe driving practices and techniques. This includes avoiding following other drivers too closely, adhering to speed limits, and obeying traffic rules.
• Maintain a clean driving record: Avoid traffic violations, speeding tickets, and at-fault accidents. These incidents can result in surcharges and increase your risk profile.
• Make timely insurance payments: Pay your insurance premiums on time to prevent late payment surcharges. Set up automatic payments or reminders to ensure you never miss a due date.
• Avoid coverage lapses: Maintain continuous insurance coverage to prevent coverage lapse surcharges. Review your policy's renewal dates and take the necessary steps to renew your coverage on time.
• Consider accident forgiveness coverage: Adding accident forgiveness coverage to your policy can help mitigate the impact of an at-fault accident and potentially avoid surcharges. Check with your insurance provider about this option.
• Shop around for insurance: Different insurance companies have varying surcharge policies and rates. When facing a surcharge, consider comparing rates and switching to an insurer with more favourable terms. Be honest about your driving record when shopping around.
• Take a defensive driving course: Completing a safe driver or defensive driving course may help reduce your insurance rates and prevent surcharges. Some companies offer discounts for completing these courses.
• Maintain a good credit history: In some states, insurance surcharges are based on driving records, age, and credit history. Maintaining a good credit score may help keep your insurance costs down.
• Understand your state's insurance laws: Surcharge regulations vary by state. Familiarise yourself with your state's insurance department guidelines to know your rights and any protections they offer.
• Appeal surcharge decisions: If you feel a surcharge has been unfairly applied, contact your insurance company and initiate an appeal process. Provide any relevant information or documentation to support your case.

Surchargeable incidents

A surchargeable incident is an incident that results in a fee, or surcharge, being added to your insurance premium. This is usually the result of a ticket or an at-fault accident, but late payments, coverage lapses, or adding a new vehicle to your policy may also result in a surcharge.

At-fault accidents

An at-fault accident is defined as surchargeable if the operator is more than 50% at fault, the vehicle is a private passenger car, and the accident involves a claim payment of more than $1000, in excess of any deductible. In Massachusetts, there are two levels of surcharge for at-fault accidents: minor and major. A minor at-fault accident results in a claim payment of more than $1000 and up to and including $5000 for damage to someone else's property, collision, limited collision, or bodily injury to others. A major at-fault accident results in a claim payment of more than $5000 for the same categories.

Traffic violations

A chargeable moving violation is any event in which you receive a ticket and are convicted. This could be a speeding ticket, a DUI, or another criminal violation such as refusing to stop for a police officer. The surcharge for a traffic violation will depend on the severity of the violation. Minor traffic law violations, such as speeding or failing to obey traffic lights, are typically assigned 2 points, while major traffic law violations, such as DUI or refusing to stop for a police officer, are typically assigned 5 points.

Other surchargeable incidents

In addition to at-fault accidents and traffic violations, there are a few other incidents that may result in a surcharge being added to your insurance premium. These include late payments, coverage lapses, and adding a new vehicle to your policy.

How to reduce or avoid a surcharge

Although it is challenging to reduce a surcharge once it has been applied, there are several ways to reduce your overall rate or prevent a surcharge from being applied in the first place. Here are some strategies to help you reduce or avoid a surcharge:

Maintain a Good Driving Record

One of the most effective ways to keep your auto insurance costs down is to maintain a good driving record. Drive safely and follow driving best practices, such as avoiding following other drivers too closely. By avoiding traffic violations and at-fault accidents, you can significantly reduce the likelihood of a surcharge being applied to your premium.

Shop Around for Insurance

Compare insurance rates from different companies, as prices can vary significantly. Get at least three price quotes and consider using online tools or your state insurance department's resources to find the best rates. Don't forget to shop for insurance before buying a new car, as rates can vary depending on the vehicle's make and model.

Increase Your Deductible

By requesting higher deductibles, you can lower your insurance costs. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage costs by 15 to 30 percent. Just ensure you have enough savings to cover the higher deductible if needed.

Reduce Coverage on Older Cars

Consider dropping collision or comprehensive coverage on older vehicles. If the cost of insurance is close to or more than 10% of the car's value, it may not be cost-effective to maintain the same level of coverage. Consult resources like Kelley's Blue Book to determine the worth of your car.

Bundle Your Insurance Policies

Many insurance companies offer discounts if you purchase multiple types of insurance from them, such as homeowners and auto insurance. You may also get a reduction if you insure more than one vehicle with the same company or if you're a long-time customer.

Maintain a Good Credit Record

Establishing and maintaining a solid credit history can positively impact your insurance costs. Most insurers use credit information when pricing auto insurance policies, and those with good credit tend to have fewer claims. Stay on top of your credit by paying bills on time, only taking on necessary credit, and keeping credit balances low.

Take Advantage of Discounts

Insurance companies offer a range of discounts that can help lower your overall premium. For example, you may be eligible for discounts if you have low mileage, are a good student, have taken a defensive driving course, or have been accident-free for a certain number of years. Don't forget to ask about group insurance discounts through your employer or any associations you're a part of.

Understand Your State's Laws and Your Insurer's Policies

Surcharge rules vary by state and insurer. Familiarize yourself with your state's insurance regulations and your insurance company's policies regarding surcharges. Understanding the rules can help you effectively dispute or appeal a surcharge and prevent future ones.

Frequently asked questions