Speeding Tickets and How They Affect Auto Insurance Rates

Believe it or not, having just one speeding ticket on your driving record can affect your auto insurance rates. Auto insurance companies determine whether or not you are a high risk driver or a low risk by considering everything from age and gender to credit history and driving record. To insurance companies, speeding tickets translates to “reckless driver.” This means that to insurance companies, you are more likely to be involved in an accident than most other drivers. The National Highway Traffic Safety Administration (NHTSA) supports this theory. According to the NHTSA, speeding is cited as a factor in one-third of all accident-related fatalities. Because of this, federal regulators are cracking down. In addition to high insurance rates, speeding tickets can cost you hundreds in fines and surcharges of as much a $30 a pop.

Drivers with speeding tickets can expect to pay hundreds, if not thousands of dollars in higher premiums each year and some may even have a tough time finding an insurance company to write an auto insurance policy at all –especially for a driver with multiple speeding tickets.

Here’s what happens after your first speeding ticket. Once you receive your first speeding ticket, auto insurance companies will place you in the high risk category. You may not see an increase in your premium right away. Many states have laws that will not allow insurers to raise rates after one speeding ticket, if you were not cited for extreme speeding. Extreme speeding is typically 15 miles above the legal speed limit in your area. Insurance companies can, however, remove any and all discounts you may have. Keep in mind that most auto insurance companies offer good driver discounts, discounts for safe driver certificates, etc. So, if you have been enjoying savings of up to say, 25%, you can kiss those savings goodbye.

If you live in a state where it is perfectly legal to raise the rates after one speeding ticket, your insurance provider will either raise your premiums based on the severity of the violation or use a formula to determine how much your rates will be raised per violation.  On the second violation or more, most states allow auto insurance providers to raise insurance premiums no questions asked, so this is where you could end up paying hundreds to thousands more per year. It is not uncommon for an auto insurance carrier to raise the rates by 75% or more on a second violation.

If you find yourself in the high risk category due to speeding tickets, don’t panic.  There are ways to restore your driving record. If your Department of Motor Vehicles (DMV) uses a point system, you may be able to take a defensive driving course to avoid having driver points added to your license. In some cases, taking a defensive driving course or a safe driver course can satisfy the violation. This means that instead of a speeding ticket, your record will read “adjudication withheld.” While taking a defensive driving of safe driver course is no guarantee, it certainly helps.

For more information about your local driving laws, visit your insurance department website. Click here to visit the National Association of Insurance Commissioners (NAIC) for a directory of state insurance department websites.