Do points increase your auto insurance rates?

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Published: 20th November 2016
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You might have heard of "points" on your driver's license, and also heard that they can significantly increase your car insurance rates. What exactly are "points" and how do they increase your car insurance premiums?

Point systems are used by many states as a form of demerit on a driver's license for infractions such as speeding or other moving violations. Points accumulate over a time period, and if you acquire enough of them - in other words, if you have too many speeding tickets or other problems in a short period of time - you can theoretically lose your driver's license.

How many points do I get for a ticket?

The number of points you obtain for various driving infractions depends on the state and (in many cases) the severity of the offense. For example, some states have a graduate system so that your speed at the time you are stopped determines how many points you get on your license. If you are doing less than 15 miles per hour over the posted limit, you might receive one point; if you are doing between 15 and 30 miles per hour over the limit, you might get two points; over 30 miles per hour over the speed limit would gain you three points. Six points might be enough to suspend your license, so three high-speed tickets could take you off the road for up to a year in this example.

For the most part, large numbers of points are reserved for truly dangerous speeds or actions such as driving under the influence. For most people, an occasional speeding ticket will not affect their license much one way or another.

How do points affect my car insurance rates?
However, it may affect your car insurance rates. More and more car insurance companies sweep DMV records to find evidence of speeding tickets, DUI or DWI convictions, and other traffic violations. Car insurance companies are allowed to do this in many states because it is assumed that someone with a bad driving record is more of a higher risk to the company than someone with a good driving record, and the company can charge accordingly.

Just how many points it will take to affect your car insurance rates is a highly individual problem
Some companies ignore a single speeding ticket with minimum points; others do not, and increase rates accordingly. It is more certain that repeated offenses in a short time, or very serious offenses, will have a bigger impact on your insurance premiums than a single "slow" speeding ticket.

Can my car insurance company cancel my policy?
It is even possible that your car insurance company will cancel your coverage if you receive too many points, especially if the points are for a very dangerous action such as driving under the influence of alcohol. Car insurance companies will often drop coverage for any customer who is a high risk, and the driver may be forced to look for insurance on a secondary market which caters to high-risk drivers. These types of policies often have many exclusions and are usually very expensive.

You can prevent points on your license by watching your speed and driving defensively. A course in defensive driving and driver safety will give you the skills you need to be a careful driver, and will also earn you a discount on most car insurance policies. In fact, some companies encourage their members to attend driver's school by giving as much as a ten percent discount for each course completed.

You can also try to remove points from your DMV record by petitioning the DMV. After a certain amount of time has passed, most states will remove the points from your license if you apply and pay a fee. You can also talk to the judge who administers your speeding ticket. In some cases, especially if it is your first offense and your speed was not too excessive, judges will agree to waive the application of points to your license if you agree to pay the speeding fine up front. Of course, not all judges will do this, and some states do not allow it; in those states, the DMV has the power to set points, and you must attend an administrative hearing to have them removed.

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