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Q

How do points affect your insurance rates?


A

Each traffic infraction you are convicted of -- such as moving violations, at-fault accidents or driving under the influence -- can be assigned a certain point value, if your state has a point system in place.  Some tickets, such as non-moving violations like a parking ticket, typically do not have points associated with them.

The more points you have on your driving record, the worse your record looks to a car insurance company. Each auto insurer has its own method of evaluating applicants, so the points on your driving record may or may not have a direct impact on the rates you pay for car insurance.

A point system is simply the assignment of "points" or values to each infraction. Then, the rating system of the car insurance company evaluates the "points" instead of each infraction. The insurance company, thus, has it's own insurance points system that may or may be the same as your state's DMV points system.

For example, a company may use this type of system:

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Description

Points 1st Occurrence

Points 2nd Occurrence

Points Each Additional Occurrence

At-fault Accident

2

3

2

Driving Under the Influence

1

2

3

No Charge Violation

0

0

0

Major Violation

4

4

4

Minor Violation

2

1

1

Not-at-fault Accident

0

0

0

Speeding

3

2

2

Because each insurance company has a different (complex) rating algorithm there is no set dollar amount or rating point comparison that can be given. If you want to find the specifics for your insurance company, their rates are filed with the state's department of insurance. You can request a copy of those rating factors and how they affect the companies' specific rates. It is very complex and not for the faint of heart.

Typically, you can expect the company rating algorithm to try to put an insurance point value on each infraction (regardless of the state driving record point system). Based upon that point value a different rating factor is use to either raise or lower the rate. Again, it is different for every company. Some companies rating algorithms are much more complex and some are simple.

For example, one major violation can increase your rate by 25 percent with one insurer and 40 percent with another car insurance carrier. Most rating systems gradually lower the impact each year.  Meaning it may be 40 percent the first year, 30 percent the second and 20 the third and if the violation then falls off your driving record the surcharge would be over by year four.


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