Traffic Violations and Auto Insurance

In most states across the country, it is legal for insurance companies to set their own merit plans. What this means is, insurance companies can reward drivers for maintaining a good driving record and “penalize” other drivers for accumulating points on their drivers licenses or accumulating traffic violations. By penalize, we mean: auto insurance companies can raise your rates, cancel your discounts, or even cancel your auto insurance policy. It is important to note that insurance companies will penalize policyholders to the extent that your state law allows. 

While all violations could have an impact on your ability to obtain a policy, your ability to keep your current policy and your rates, some violations are more severe than others. DUI/DWI, speeding, and reckless driving convictions will have the greatest impact on your auto insurance.

DUI/DWI and Auto Insurance

If you are convicted of a DUI/DWI, your license will be suspended immediately, but temporarily. Depending on the case, you may have to spend time in jail, pay hundreds to thousands of dollars in fines, and attend an approved alcohol or substance abuse program. The amount you will have to pay and the amount of time you will have to spend time in jail depends on your state law and the severity of the case. Once you have a DUI/DWI on your record, auto insurance companies will place you in the high risk category immediately. In many cases, you will have to obtain auto insurance (usually SR 22 auto insurance) through your states Automobile Insurance Assigned Risk Program. The rates for this type of insurance are much higher than standard auto insurance. In some cases the rates are 75% (or more) higher than a standard auto insurance policy.

To find out more information about your state Automobile Insurance Assigned Risk Plan, contact your Department of Motor Vehicles (DMV). Your DMV may also have a list of non-standard/high-risk auto insurance providers in your state. Your State Insurance Department will be helpful as well, so click here to visit the National Association of Insurance Commissioners (NAIC) for a directory of state insurance department websites.

Speeding and Auto Insurance

In some states, having just one speeding ticket on your driving record can affect your auto insurance rates and in others, two or more will have an impact on your insurance rates. Why? 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. National Highway Traffic Safety Administration (NHTSA) data supports the theory. According to the NHTSA, speeding accounts for one-third of traffic fatalities.

After you receive your first speeding ticket, your auto insurance company will place you in the “high risk” category. In some states, auto insurance companies cannot raise your rates for a first offense, but they can cancel any discounts that you may have on your policy. This is just like raising your rates. In some states it is perfectly legal to cancel discounts and raise the rates with your first speeding ticket. In all states, it is legal to raise your rates after one speeding ticket, if you were cited for extreme speeding. It is not uncommon for an auto insurance carrier to raise a policyholders auto insurance rates by 75% or more on a second speeding violation. If allowed, some carriers don’t mind raising the rates on the first.

Aggressive Driving and Auto Insurance

There are more than 6,800,000 crashes each year in the United States. A large portion of these accidents is caused by aggressive driving. While aggressive driving includes the less serious offense of reckless driving in the eyes of the law, auto insurance companies do not treat reckless driving as a less serious offense. A reckless driving conviction will result in higher auto insurance premiums in some cases and in others, insurance companies will flat out deny coverage to such a driver. Aggressive/reckless driving includes:

•    Weaving in and out of traffic
•    Tailgating other drivers, especially slower drivers
•    Passing on the right shoulder
•    Horn honking
•    Flashing lights
•    Making obscene gestures

If any of the behaviors associated with reckless driving causes a traffic accident, and you are found guilty, your auto insurance company may not renew your insurance policy and your record will place you on auto insurers high risk list.

If you want to avoid traffic violations and in turn, keep your insurance rates low, the solution is simple. Don’t speed. Don’t drink and drive. And always keep your cool behind the wheel.