Question: Can an insurance company add points to your insurance for being in the military? If so, why can it do this?
Answer: You are more likely to get a discount for military service than a penalty.
While insurance companies do track points (referred to as insurance points) that cause your premiums to rise, those points stem from accidents and tickets, not your occupation. (See “Do insurers charge for each point on your license?” for more information on insurance points.)
Instead, if your auto insurance company has found that your occupation tends to make you a high-risk driver, you may pay higher base rates. Certain types of professions require one to drive a lot or keep long hours – such as lawyers, real estate agents, social workers and doctors -- and statistically have been shown to have higher rates of accidents, so their auto insurance base rates are typically higher.
Car insurance base rates are applied to broad categories of drivers (for instance, male drivers ages 16 to 21 in Austin, Texas) based on data that insurance companies gather and then make educated guesses on how likely the group is to make a claim. That base rate is the starting point for specific information that can lower or raise your rates.
Some recent studies say that military members returning from active duty have a tendency to be in more accidents, but, in general, this hasn’t yet caused this occupation to receive higher base rates by insurers. (See “Returning soldiers have more accidents, study finds”)
Currently, though, instead of being dinged by insurers for being in the military, being a service member tends to get you discounts on auto insurance.
Some states require a car insurance discount for military members, and also many auto insurance providers offer a discount on their own to members of the military. The discount amount varies but usually starts around 15 percent. (See “Educational, military and professional discounts”)
If you are a military member and believe you are being charged above average car insurance rates, look to see if it’s due to rating factors other than your profession.
You may be deemed a high-risk driver if you have multiple traffic convictions or accidents or show a lapse in insurance coverage. A clean driving record will not only get you cheaper car insurance rates, but usually also allows you to qualify for a safe driver discount.
If you were deployed overseas or were without a car during training and just let your insurance lapse, then your car insurance rates could be higher due to this gap in coverage. If you are without a vehicle to insure for a period of time, you can get a non-owners policy to keep continuous insurance coverage.
To get the best car insurance rates as a member of the military, first ask your auto insurance provider if you are eligible for any special discounts. Then comparison shop with other insurance companies to see what rates and discounts are offered for military members so that you can find the cheapest car insurance for your particular situation.