How Your Driving Record Affects Your Insurance Rate

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If you’re a safe driver who obeys traffic laws, you’ll pay lower car insurance premiums than your neighbor who has several speeding tickets on his driving record. How much more will you have to pay for car insurance if your driving record isn’t spotless? It depends on what your traffic violations were and when they happened, as well as the insurance company’s rating system.

Violations and Accidents

Law enforcement officers can give you a violation or traffic ticket for a number of different offenses on the road—and some are more serious than others (and more likely to increase your insurance premiums). For instance, a ticket for a seatbelt violation, improper turn, illegal U-turn or speeding a few miles per hour over the limit is viewed as a minor violation. Those offenses may not affect your premium very much.

More serious violations include speeding more than five miles per hour over the speed limit, reckless driving, ignoring a stop sign or red light, driving under the influence, and hit-and-run accidents. These are likely to result in a higher insurance premium, at least for a few years.

If you’re involved in a car accident and the police report determines that you were at fault, that will also affect your insurance rate.

Your Motor Vehicle Report

Every licensed driver has a Motor Vehicle Report, or driving record, on file with his or her state’s Department of Motor Vehicles (DMV). The report shows the status of your license (whether your license is currently valid, suspended or expired). It also shows any accidents that were deemed to be your fault or any traffic violations you’ve had for the past few years. Different states keep accidents and violations on the report for different periods of time, but it’s usually about three to five years.

Some traffic violations won’t appear on your record; for instance, if you have the option of going to driving school to erase a ticket and you do so, that ticket will be removed. Also, if you received a violation for a correctible offense, such as a broken taillight, that ticket may not go on your record if you correct the problem promptly.

In most states, you can get a copy of your Motor Vehicle Report from the DMV for a small fee. Start by checking your state’s DMV website.

How Insurers Use Your Report

Car insurance providers use your driving record to help determine how much risk they’re taking on to insure your car. If you’ve had an at-fault accident or a couple of tickets in the past few years, they may refuse to provide you with coverage or provide your coverage at a higher rate to minimize their risk.

Along with your age, location, credit score and other factors, an insurance company will consider the information in your driving record to determine whether to insure you and at what rate. Most insurers place each potential customer into one of three categories, according to the Office of the Insurance Commissioner in Wisconsin. Those categories include:

Preferred. If you have a clean driving record from the past three to five years, you’ll be in the preferred category. That means the insurer views you as low-risk and will give you the lowest rates.

Standard. If you have a reasonably clean driving record, you’ll probably pay a little more than the preferred rate.

Nonstandard. If you don’t have much driving experience, or if you have tickets, accidents, poor payment history or a history of drunk driving or recklessness, you’ll be in this high-risk category. Usually drivers in this category pay the highest rates.

Clearly, one of the best ways to save money on car insurance is by driving safely and obeying all traffic laws. Another way to save? Try Gabi’s comparison tool to see if you can get the same insurance coverage for less.

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