Your Driving Record and How It Effects Your Premium

Your insurance company has the right to review your driving record at any time.  Typically, they’ll review your record when you apply for coverage, request changes to your policy, add a vehicle, or renew your policy.  This is to evaluate your risk potential, or determine if you are insurable at all.

Generally, what the insurance company will analyze is the number of points on your license.  When found guilty of a traffic violation (moving violations, parking tickets, at-fault accidents, etc.) you are assigned a certain number of points on your license. The more points you accumulate, the worse your record. The points on your driving record may or may not affect your insurance rate since each company has their own way of evaluating violations.

Insurers typically evaluate your points using their own system to determine the amount of your rate increase (if your rates increase at all).  Most companies, however, use the Safe Driver Insurance Plan, which lists the different types of violations and assigns a points value to each one, based on the severity of the incident.  Under this plan, as you accumulate points, your rates are subject to increase.

Your driving record isn’t the only information your insurer can use to underwrite your policy.  Insurers also use credit scores to determine rates. If you have a good credit score, your rates are likely to be lower than someone with a bad credit score. Insurance underwriters perceive a direct relationship between your credit score and the chances of you filing a claim. Someone with a history of being late on bill payments and who often opens and closes savings or credit accounts wouldn’t be viewed as a good insurance risk.

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