How Driving Record Affects Auto Insurance Premiums

Having points on your license can make your car insurance more expensive. While insurance companies don't directly use a driver's license points to determine quotes, they do conduct their own checks into each potential customer's driving history. This includes looking at your Motor Vehicle Report (MVR), which lists any tickets and claims you have received. If your MVR details a checkered driving history, your insurance rates will climb.

How do points affect insurance rates?

The impact of points on your license will depend on the state you live in and the insurance company you use. If you accumulate a certain number of points, your license will be suspended or revoked.

Insurance companies evaluate your driving record when determining your rates. They typically charge higher rates for incidents that may also earn you driver's license points, like speeding, distracted driving, reckless driving, and driving under the influence. The systems used by insurance companies to track driving infractions are usually more nuanced than a simple point system and may vary significantly by carrier.

While one carrier may raise rates substantially at renewal for a driver with a recent speeding ticket, another may have higher rates for drivers who text and drive. Even if your state does not use a driver's license point system, you will likely still see a surcharge when your policy renews for driving infractions.

Having points on your driver's license will also impact your car insurance rates if you decide to switch carriers or obtain new car insurance. Car insurance companies will likely ask about your driving record during the quoting process before running your official motor vehicle record and agreeing to offer you coverage.

If your license has been suspended, you will likely be seen as a high-risk driver by insurance companies. You may be required to obtain SR-22 insurance, which is a form that a driver may need to file with the state to verify that your state's minimum mandatory auto liability requirements are being met.

Insurance points differ from driver's license points, which are issued by your state's Department of Motor Vehicles (DMV). Insurance companies use a separate proprietary point system to help them set rates for individual drivers. An insurance company's point system may match up with a DMV points system, but in most cases, they are entirely separate.

Most states use a point system to keep track of traffic violations and accidents. You should expect an increase in insurance premiums once a ticket or violation appears on your DMV record.

How are points removed from a license?

The process of removing points from a driver's license varies depending on the state in which the driver resides. In most cases, points will be removed from a driver's record within three to five years, with minor violations such as speeding tickets falling off after three years. However, more severe infractions, such as driving under the influence (DUI), can remain on a driver's record for much longer, ranging from seven to ten years or even decades in some states.

In certain states, drivers have the option to take a defensive driving or driver improvement course to reduce the number of points on their license. For example, in Georgia, drivers can request a point reduction from the Department of Driver Services (DDS) of up to seven points every five years by completing a Driver Improvement course. Similarly, in New York, drivers can reduce their points by completing the Point and Insurance Reduction Program online or in person.

It is worth noting that while points may be removed from a driver's license, the violations remain a part of their permanent driving record. Insurance companies typically consider driving infractions for three to five years when determining rates, and more serious infractions like DUIs may be considered for longer.

How long do points stay on a license?

The length of time that points stay on a license depends on the state or country that issued the license. Here is a summary of how long points stay on a license in the US and the UK:

US

In the US, the length of time that points stay on a driver's license varies by state. Some states automatically clear points after a certain amount of time, while others have more complicated systems. For example, in California, points ranging from zero to three are assigned based on the severity of an offense. Most minor offenses, like speeding, will result in one point on a driver's license. These points can lead to a suspended license, which will result in higher insurance rates and may make it difficult to find a policy.

UK

In the UK, penalty points, also known as endorsements, stay on a driving license for three years. They remain on the driving record for four to eleven years, depending on the severity of the conviction. The minimum number of points that can be issued per offense is three, and the maximum is eleven. If a driver acquires twelve or more penalty points within three years, they can be disqualified from driving.

What are the consequences of having too many points?

Having too many points on your license can lead to several negative consequences that impact your driving privileges and financial costs. Here are the key consequences of accumulating too many points:

License Suspension or Revocation

Most states have a points system that correlates to moving violations, and if you exceed a certain threshold of points within a specific time frame, your driver's license will be suspended or revoked. The threshold for license suspension varies by state and age group. For example, in Colorado, adult drivers (21 and older) face a license suspension with 12 or more points within 12 months or 18 or more points within 24 months. Minors under 18 years old in Colorado face stricter limits, with their license suspended for accumulating 6 or more points within 12 months or a total of 7 points before turning 18.

Increased Insurance Premiums

Accumulating points on your license is viewed negatively by insurance companies, who consider you a higher-risk driver. As a result, your insurance premiums will increase significantly. The increase in premiums varies by state and insurance company, but you can generally expect a substantial rise in costs. For example, in North Carolina, a speeding ticket can result in an average insurance increase of 50%. In contrast, Pennsylvania has a more modest increase of 9% on average.

Mandatory Driver Improvement Courses

In some states, accumulating too many points may result in the requirement to attend mandatory driver improvement or defensive driving courses. These courses aim to educate drivers on safe driving practices and can help reduce the points on your license.

Administrative Hearing Process

If you accumulate too many points, you may have to undergo an administrative hearing, where you can present your case, challenge allegations, and provide evidence. The hearing determines the duration of your license suspension and whether any reductions or extensions are warranted.

SR-22 Insurance Requirement

If your license is suspended due to excessive points, you may be required to obtain SR-22 insurance. This type of insurance verifies that you meet the state's minimum auto liability requirements and is typically mandated for high-risk drivers seeking to reinstate their driving privileges.

Policy Cancellation or Non-Renewal

Insurance carriers may also choose to cancel or non-renew your policy due to the accumulation of points or a resulting license suspension. This can further complicate your ability to obtain affordable insurance coverage.

How can you get cheaper insurance with points on your license?

While having points on your license will inevitably cause your insurance premiums to increase, there are still ways to get cheaper insurance.

Firstly, it is important to understand that insurance companies do not directly use driver's license points to determine quotes. Instead, they conduct their own checks into each potential customer's driving history by reviewing their CLUE report and MVR (motor vehicle report). These documents list the claims and tickets that a driver has received. If either document details a checkered driving history, the driver's rates will climb.

Therefore, one way to get cheaper insurance is to take action to remove your points. Each state has its own procedure for this. For example, in New York, you can complete the Point & Insurance Reduction Program online or in person, while in New Jersey, you can take a defensive driving course. After completing your required coursework or program, submit proof to your insurance company.

Another way to get cheaper insurance is to compare car insurance quotes. Every insurance company will view your driving profile differently and price your premium differently. Shopping for car insurance quotes every six months is a good way to ensure you get the cheapest rate.

You can also take a driving class or a defensive driving course. In select states, insurance companies may offer a discount for taking an approved course.

Additionally, you can take advantage of other discounts. Most car insurance companies offer a number of discounts for eligible drivers, such as bundling, paid-in-full, and good student discounts. If you are practicing safe driving habits, you may want to consider a telematics program, which allows your insurance company to track your driving habits for potential savings.

Finally, you can improve your credit. In states that allow it, improving your credit may bring down your car insurance rates. Carriers typically see drivers with poor credit as riskier to insure and usually raise rates for these drivers.

Frequently asked questions