1. Clean Driving Record: Lower Premiums
- The Ideal: A clean driving record, meaning no accidents, no moving violations, and no traffic tickets, is the best scenario for most drivers. Insurers consider you a low-risk driver if you have a long history of safe driving.
- Discounts: Some insurers offer safe driver discounts or accident-free discounts to drivers with no history of claims or violations. You might save anywhere from 10% to 30% on your premium, depending on your insurer and location.
- How It Helps: A clean record is typically rewarded with the lowest possible rates because insurers believe you’re less likely to file a claim. Insurers may also consider your clean driving history as an indication that you will continue to drive safely.
2. Traffic Violations: How They Impact Your Rates
Traffic violations such as speeding tickets, running red lights, or illegal lane changes can increase your insurance premiums, as they indicate a higher likelihood of an accident. Here’s how different violations might affect your rates:
- Speeding Tickets: Speeding is one of the most common driving infractions. A speeding ticket can raise your premiums by 10% to 25%, depending on how many violations you’ve had and your insurer’s policy.
- Higher Speeds, Higher Premiums: Tickets for driving at excessive speeds (e.g., 20 mph over the limit or more) will likely increase your rates more than minor speeding tickets.
- Running Red Lights or Stop Signs: These types of infractions can also raise your premiums by 5% to 20% because they indicate risky driving behavior.
- Other Violations (Illegal Turns, Failure to Yield): While less severe than speeding, these infractions can still have a modest impact on your rates, typically causing a 5% to 15% increase in premiums.
- Accumulation of Points: Many states use a point system where traffic violations are assigned points on your driving record. Accumulating multiple points may increase your insurance premiums and can result in surcharges or even a policy cancellation in extreme cases.
3. At-Fault Accidents: Major Rate Increases
Being at fault in an accident is one of the most significant factors that will impact your car insurance rates. Insurance companies consider drivers who have been involved in accidents to be higher-risk, particularly if the accident results in a large claim payout.
- Rate Increase: If you’re at fault in an accident, your rates could increase by 20% to 50%, depending on the severity of the accident and your insurance provider. The more severe the accident, the greater the premium increase.
- The Role of the Accident: Minor accidents may result in a smaller increase, while major accidents (e.g., involving injuries, significant property damage, or multiple vehicles) will likely lead to a much higher premium increase.
- The Number of Accidents: If you have multiple accidents in a short period, insurers may view you as an even higher risk. This can lead to even steeper rate hikes, or the insurer may choose to cancel or non-renew your policy.
- Accident Forgiveness: Some insurance companies offer accident forgiveness programs that waive the first accident’s impact on your rates, particularly if you’ve been a customer for a long time with a clean driving record.
4. DUI/DWI Offenses: Significant Premium Hike
A DUI (driving under the influence) or DWI (driving while intoxicated) conviction is one of the most serious violations you can have on your driving record, and it can result in a dramatic increase in your car insurance premiums.
- Rate Increase: A DUI/DWI can increase your premiums by as much as 50% to 100% or more, depending on the insurer and state laws.
- Long-Term Impact: A DUI stays on your driving record for several years (typically 5 to 10 years), and the impact on your premiums can last for the same duration. After a DUI, you may also be required to carry SR-22 insurance, which is a high-risk insurance policy that comes with even higher premiums.
- Insurance Difficulties: In some cases, a DUI can make it difficult to find affordable insurance. If your insurer drops you, you may need to seek coverage through high-risk insurance pools or non-standard insurers, which often charge significantly higher rates.
5. Accidents Without a Claim: Minor Impact
In some cases, you might be involved in an accident but not file a claim. For example, if the damage is minor, or the other driver is at fault, you might choose to pay for repairs out-of-pocket.
- No Impact on Premiums: If you’re not filing a claim, the accident might not directly impact your insurance rates, especially if it’s determined that you were not at fault.
- How Insurers View It: However, insurers will still check your driving record when calculating your premiums, so a history of frequent accidents—even without claims—can still lead to higher rates.
6. The Role of Claims History: The Frequency of Claims
Even if you haven’t been at fault in a crash, your claims history matters to insurers. A history of frequent claims, especially minor ones (like hitting a mailbox or fender-bender), can increase your premiums.
- High Frequency of Claims: If you’ve filed multiple claims in a short period, insurers may view you as more likely to file future claims. This can cause your rates to increase.
- Non-Accident Claims: Claims for things like windshield repairs, theft, or vandalism might not impact your rates as much as accident-related claims, but frequent non-accident claims can still lead to higher premiums.
7. Impact of a Bad Driving Record on Policy Renewal
If you have a poor driving record, your insurance company may not renew your policy when it’s up for renewal. Insurers often review your driving history when it’s time to renew your policy, and a history of accidents, violations, or claims might lead to a refusal to renew or a significant rate increase.
- Non-Renewal: If your insurer decides not to renew your policy due to your driving record, you will need to find a new insurer. You may end up with higher premiums if you’re classified as a high-risk driver.
- State Laws on Non-Renewal: Some states have laws that limit how much an insurer can raise your rates at renewal, particularly after a first accident or a minor violation. However, in other states, insurers have more flexibility in adjusting rates or choosing not to renew based on your driving history.
8. How to Lower Insurance Costs With a Poor Driving Record
If you have a poor driving record and want to lower your premiums, here are some strategies to consider:
- Defensive Driving Courses: Some insurers offer discounts to drivers who complete a defensive driving course, even if they have traffic violations or accidents on their record.
- Increase Your Deductible: Raising your deductible can lower your premiums, but be sure you can afford to pay the deductible out-of-pocket in case of an accident.
- Shop Around: Not all insurers weigh traffic violations or accidents the same way. It’s worth shopping around to see if another insurer offers more competitive rates for drivers with similar records.
- Telematics Programs: Some insurers offer pay-per-mile or telematics-based programs where your premiums are based on how safely you drive, tracked by an app or a device in your car. If you drive safely, this can result in lower rates, even if you have past violations.