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June 8, 2021

How License Points Affect Car Insurance Rates

How License Points Affect Car Insurance Rates

Our driving habits almost always impact how much we pay for our car insurance. After all, the best way for car insurance companies to know that an insured driver is a safe driver, too, is to examine your driving record. Your state’s DMV will have this information on hand, and your record will reflect any accidents or traffic violations that you might have experienced.

When you commit driving infractions, your state might add points to your license. The points will reflect your risks as a driver, and the more you have, the greater your risks. As a result, auto insurers will often penalize drivers who have a lot of points with higher premiums.

Why Insurers Care About Driving Mistakes

Auto insurers charge you a premium based on how likely you are to file a claim. After all, if you are more likely to cost them money, then you are going to have to pay more for coverage. A driver’s history behind the wheel is a clear indication of their likelihood to cost the insurer money.

Those with points on their license are more likely to commit further infractions. They are likely to pay more for their policy as a result. However, that’s not to say you don’t have an incentive to improve your driving habits, and by doing so, you might see your rates drop over time.

How Do Points Systems Work?

Different states use different points systems. However, they will usually add a certain number of points to your license if you commit certain infractions. These include mistakes like:

  • Any type of reckless driving
  • Speeding
  • Driving under the influence of drugs or alcohol
  • Driving with a suspended license
  • Driving uninsured

Depending on the nature of the infraction, the DMV will add a different number of points to your license. DUIs generally have higher points assigned to them than speeding tickets, for instance.

Points generally expire over time. However, what’s important to remember is that if you accumulate certain number of points in a certain time frame (often a year) then you could face significant penalties, including a license suspension. In general, you will see a few points fall off your record every year you go without adding them.

As your points increase, so do your risks to insurers. Some will be more lenient than others, and they won’t raise your rates just because of a single infraction involving points. Others, however, might raise your rates significantly, particularly if you commit serious offenses.

In the end, it’s better to be a safe driver than to run the risk of accumulating points on your license. Consider enrolling in a safe driving course to re-learn the basics of safe driving and ask your agent if you can qualify for an additional auto insurance discount by doing so.

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