How does your driving record affect your auto insurance?
Most U.S. states have motor vehicle departments that use point systems to track your driving record. Each type of infraction you can make – moving violations such as speeding or parking tickets for example – has a different point value. When you commit one of these violations of the law then the corresponding number of points is added to your driving record. As you rack up these points your driving record worsens.
It’s also required that drivers have minimum amounts of auto insurance in each state. To obtain this, auto insurance companies will review the driving record of people that apply for a policy. Different policyholders pay different premiums primarily because of the last 3 -5 years of their driving records and the risk that is associated with them.
Insurance companies believe that drivers who have had tickets or accidents in the past 3 – 5 years are more likely to have them in the future and are therefore more of an insurance risk. Additionally, insurance companies get your driving record from all states you’ve been licensed in over the past 3 -5 years, not just the one you currently reside in.
If your driving record has negative information in it then it’s likely your insurance rate will increase. And this is just at the initial application. Any time you request a change to your policy, add a vehicle or change the covered vehicle or when your policy is up for renewal, your insurance company can reassess your risk and increase your premiums. These increases usually come from an internal “point” system insurance companies use to determine how much riskier it is to insure you.
Basically, your driving record is the most influential thing on your auto insurance. It affects your initial rate as well as coming into play any time you change or renew your policy. And once you go over a certain amount of points you lose your license and without a license you also lose your insurance