Insurance Services Office

How Your Driving Record Impacts Your Insurance Rate

Not everyone understands how the Department of Motor Vehicles in their particular state rates them as drivers. Most states use a point system to keep track of moving violations, driving under the influence, accidents where you are at fault, and parking tickets. As these points are added to your record, your driving record goes down. When you reach a certain number of points your license will be revoked. Until that time, the more points you have the harder it will be for you to get a reasonable deal on your auto insurance. The more points you have the higher risk you are to the insurance company.

Your driving record is made available to insurance companies if you apply for an auto insurance policy with that company. There are two reasons that the insurance company might request the details of your record: 1) the insurance company may need this information to evaluate your risk potential so they can calculate how much your policy will cost; and 2) they will review this information to determine if you meet their standards and whether they will even issue you an auto insurance policy. All auto insurance companies have different requirements. So, depending on the insurance company’s policies, the points on your driving record may or may not count when they are calculating the rates for your policy.

Once you have your auto insurance policy you are still not off the hook. This is because the insurance company might do periodic checks on your driving record to see if there are any new points since your policy was issued. Besides these random checks of your driving record there are specific times when you can count on them reviewing your record such as: 1) if you request a change in your policy; 2) at the time of renewal of your policy; and 3) whenever you add another vehicle.

When your insurance company does a review or your records and they find that you have additional points since their last review, they most likely will increase your premium. Each insurance company has their own particular system to calculate the amount of any increase but most companies use a system issued by the Insurance Service Office. It’s a very simple system, each type of violation is assigned it’s own point value depending on the severity. As your points add up the insurance company will increase your auto premium.

If you receive a certain amount of points, the court will order you to enroll in a Defensive Driving Course. These courses will teach you how to avoid distractions while driving, how to drive in bad weather, impairments which cause you to be unable to drive, etc. If you complete this course successfully there is a possibility that your insurance company will recognize this and offer you some sort of discount. The best way to keep your insurance premiums as low as possible is to be a safe, responsible driver and avoid accidents and getting traffic violations.