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Is there a difference between insurance points and license points?

Insurance points are different than driver's license points that your state's Department of Motor Vehicles (DMV) puts on your driving record for various traffic offenses. Insurance companies use a separate proprietary point system to help them set rates for individual drivers. It's possible that an insurance company's point system will match up with a DMV points system but in most cases, they are completely separate.

The DMV point system

In most states, traffic violations and accidents are tracked using a point system. These point systems tend to vary by state.

If the Department of Motor Vehicles (DMV) in your state uses a point system (not all states use them) any time you are issued a ticket for speeding or other driving infractions the points associated with that ticket will hit your DMV record. If you accumulate a specific amount of points in a certain amount of time (it varies by state) your license will often be suspended or revoked.

Points vary by the severity of the infraction, while a speeding ticket may only put one point on your DMV record, a reckless driving ticket could easily put four points or more on your license. Your insurance company will take these tickets and accidents into account but will incorporate them into their own point system.

Some moving violations that usually have points assigned to them include:

  • Speeding
  • Reckless diving
  • Leaving the scene of an accident
  • Passing a stopped school bus
  • DUI
  • Improper passing
  • Failure to stop or yield

If you manage to put a lot of points on your license and hit a certain threshold (it varies by state) your license will be suspended. To find out about your specific state's points system as well as what violations have points assigned to them, check with your local Department of Motor Vehicles.

The majority of points from minor traffic infractions (speeding, running a red light) fall off of your DMV record within three years but this also varies by state. More serious offenses, such as a DUI or driving without insurance, can stay on your record for much longer. In most states, it is at least 7-10 years, and, in some states, it is basically forever. In Florida, it takes 75 years for a DUI to come off your driving record.

Once a ticket or infraction shows up on your DMV record, your insurance rates will likely go up. However, it may not happen immediately. Insurance companies are not notified every time you get a ticket, it is up to them to pull your DMV record at renewal time. This means that your rates will probably stay the same until you hit your renewal date, file a claim, add a driver, or buy a new car.

How much does 3 points affect insurance premiums?

There is no accurate way to answer this question, other than to say, it varies. Both the state you live in as well as what insurance company you use will impact the increase in your premium.

In some states, 3 points may be a lot, in another state it might not be much at all. The same can be said for insurers. They all rate risk differently and surcharge at different levels for the same infraction. In general, the best idea is to contact your insurer and ask for their surcharge schedule.

While it's hard to pinpoint the exact increase, we can give you a bit of an idea for specific states. Insure.com ran the numbers and found the average car insurance increases for a speeding ticket for 16 to 29 miles per hour over the limit in every state. The analysis found that North Carolina was the big winner when it comes to insurance increases after a speeding ticket.

The Tar Heel state sees an average increase of 50%, Michigan is second with a 43% increase and California rounds out the top three with a 34% increase. On the other end of the spectrum is Pennsylvania, where the jump is nine%  for the average driver.

Car insurance point system

The majority of point systems used by insurers are proprietary so they can vary dramatically by insurance company. However, many insurance carriers use the system based on the guidelines set up by the Insurance Services Office (ISO).

Insurers assign points to your insurance record for issues such as speeding tickets and other infractions, but they also ding you for claims. Once your point total hits a specific threshold, your premium will be "surcharged." In other words, your rates are headed up. If your point total gets too high, you may be dropped altogether.

As an example, if your insurance company assigns three points for a speeding ticket for 10 mph over the limit and 2 points if you are caught running a red light your insurance record will have 5 points on it. Insurance companies have surcharge schedules that detail the rate increase for various point totals. If their surcharge schedule indicates that a driver with 5 points would be surcharged 1.25, then your rate is headed up 25%  until the tickets fall off of your driving record, which will usually take three years.

Insurance points are used to assess your eligibility for auto insurance coverage and for calculation of rates. In many cases the impact of insurance points lessens over time. As time goes by, if you keep your driving record clean, and don't file any claims, the insurance points on your record could be reduced, leading to a lower premium.

It is always possible to see the specifics of your insurance carrier's rating system. Contact your insurance agent or your state's insurance regulatory body and request your insurers surcharge schedule. All insurance companies must file their rates with the state insurance regulators.

How long does it take to remove points from your license?

It varies depending on the state you live in but in most cases, you can expect minor violations such as speeding tickets to drop off your record in three to five years. More serious infractions such as DUI's tend to stick around for seven to 10 years and in some states, for decades.

You should be able to get specific information from your state's Department of Motor Vehicles or like state agency on how points are accumulated and removed from a person's driving history.

For examples of how some states handle DMV points see below:

  • Pennsylvania: The Keystone State allows points to be removed from your driving record for safe driving. You can get 3 points removed from your driving history for every 12 consecutive months (from the date of the last violation) you go without a violation.

Furthermore, in PA, once a driving record is reduced to zero and remains at zero points for 12 consecutive months, any further accumulation of points is treated as the first accumulation of points.

  • Utah: Utah's point system states that if you go one full year without a moving traffic violation conviction, one-half of your accumulated points will be removed from your driving record. If you drive two straight years without a conviction, all points are deleted. Otherwise, individual convictions are automatically removed three years after the date of the violation.
  • New York: In New York State the DMV computer system automatically calculates your point total when you are assigned points on your license for a moving violation. Your point total is the total number of driver violation points that you received during the 18 previous months.

Points are counted from the dates of your traffic violations, not from the dates of your traffic convictions. A traffic conviction is required for the points to appear on your driver record. Eighteen (18) months after the date of the violation, the points for that violation are removed from your point total. The convictions remain on your record.

What happens when you get points on your license?

It will vary depending on the state you live in but in most cases the only major impact of a few points on your license is more expensive insurance. If you manage to get a speeding ticket you can expect your insurance rates to go up but that should be the only major consequence of the points.

However, if you end up with numerous tickets in a short amount of time or a major traffic infraction on your record, the pain will be much more severe. You could end up with a suspended license, major fines and even jail time.

As an example, in California, points ranging from zero to three are assigned based on the severity of an offense. Most minor offenses such as speeding will result in one point on your license. Your license will be suspended for six months and you'll be on probation for a year if you get:

  • 4 points in 12 months
  • 6 points in 24 months
  • 8 points in 36 months

A suspended license will result in dramatically higher insurance rates and may make it difficult to even find a policy.

How to get points removed from license?

Once again, the answer varies by state. Here are a few tips for getting points removed from your DMV record:

  • Defensive driving course: Many states allow drivers to take a state approved defensive driving course to remove a few points from your license. Verify this is an option in your state and get a list of approved courses. Once you pass the course you will have to contact the DMV to ask for the points to be removed. Most states only allow this option to be used once every few years.
  • Fight the ticket: If you feel the ticket was unwarranted or there were mitigating circumstances, you can go to court and ask for the ticket to be dismissed or reduced. You may be able to get the points reduced or even eliminated.
  • Verify points drop off: Points will impact your insurance rates as long as they stay on your driving record. Check your DMV record when the points are set to drop off to ensure they have been removed. If they have not disappeared, contact the DMV to request the points be expired.