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When assessing your rates and monthly premiums, an insurer’s goal is to gauge your overall risk of causing an accident. Certain demographic factors like age, income, education and location point to certain driving habits, such as night time driving, commuting in heavy traffic, or highway driving; these habits in turn point to higher or lower risk of an accident. While these elements weigh significantly on rates and premium costs, a driver’s history goes beyond any of these general demographic factors.
Each time you are cited for speeding, reckless driving, or any other moving violation, it becomes part of your driving history. Most insurers don’t require drivers to report when they are cited for moving violations, but many will review your driving history at certain intervals, usually at least once per year, and make adjustments to your rates based on any infractions. Similarly, most insurers will audit your driving history prior to signing you on as a customer. If an insurer provides coverage to you without looking into your driving history right away, you can usually expect them to audit such information within the first year of coverage.
most insurers provide little to no information to the public on exactly how rates are calculated…In states where insurers are required to provide their methodology to their customers, many put it in the form of hard to read spreadsheets and formulas that do little more than confuse anyone except the experts
Most expert sources agree, insurance rate calculations vary significantly from company to company, and most insurers provide little to no information to the public on exactly how rates are calculated. While most states require insurers to file their “base rate” for drivers with the state’s insurance regulatory body, it’s rare for insurers to make such methodology available to the public. In states where insurers are required to provide their methodology to their customers, many put it in the form of hard to read spreadsheets and formulas that do little more than confuse anyone except the experts. It’s safe to say that some insurers assess rates more leniently than others, and some have higher rate increases following moving violations or tickets.
According to an analysis of nearly 500,000 policy quotes conducted by Insurance.com, getting a single ticket can raise an average driver’s auto insurance premiums by as much as 22%. Of course, depending on the infraction, the ‘bump’ to one’s rates can be much smaller; on the other hand, if a driver is cited for multiple infractions at once, it might be higher than 22%.
getting a single ticket can raise an average driver’s auto insurance premiums by as much as 22%
The following is a list of how much common tickets will raise auto premiums, on average, as reported by Insurance.com:
- Reckless driving: 22%
- DUI first offense: 19%
- Driving without a license or permit: 18%
- Careless driving: 16%
- Speeding 30 mph over the limit: 15%
- Failure to stop: 15%
- Improper turn: 14%
- Improper passing: 14%
- Following too close/tailgating: 13%
- Speeding 15 to 29 mph over limit: 12%
- Speeding 1 to 14 mph over limit: 11%
- Failure to yield: 9%
- No car insurance: 6%
- Seat belt infractions: 3%
According to Insure.com, after an at-fault accident or a serious infraction on a driver’s record (such as a DUI or reckless driving), “Many car insurance companies follow the Insurance Services Office’s (ISO) standard of increasing a premium by 20 to 40% of the insurer’s base rate (which is the average rate charged in the state before discounts and other adjustments, plus the insurance company’s claims-processing fee). According to the ISO, the surcharge for multi-car policies is 20% of the base rate for the first two vehicles on the policy, and 40% for a single-car policy.”
Depending on your insurer, the company may increase your rates more or less than the aforementioned averages. If you suspect your insurer is gouging you, it’s probably time to shop around. If you find a good quote from another company, bring it to the attention of your current insurer, provide it in writing to an agent or representative, and then request they match or beat the quote. If your insurer refuses, it’s probably a good time to consider switching to a more lenient company that won’t assess your next accident so severely.
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If you suspect your insurer is gouging you, it’s probably time to shop around.
In the event your insurer is offering you a competitive rate based on your driving history, you can further lower your insurance costs by raising the amount of your deductibles for collision, underinsured motorists, and comprehensive. Insurance.com reports that raising such deductibles from $250 to $500 can lower your rates for those sections of your auto policy by as much as 30%. If you have an older car that’s not worth more than a couple thousand dollars, consider dropping such coverages altogether to save even more money – but be sure to maintain your state’s minimum required liability insurance to stay legal on the road.