How does your driving record affect your insurance rate?

Car insurance is expensive enough, but if you’re an aggressive, inattentive driver (or have terrible luck), that bad driving record will cost you even more. Every speeding ticket, fender bender and blown stop sign adds up. If you’re a truly dangerous driver — busted for DUI or leaving the scene of an accident — your insurance company might drop you altogether if it finds out. How can you keep your slate clean, avoid a rate hike and get the best insurance rate?

Before we get into that, another question: How does your insurance company know if you’ve slipped up? Before we answer that, know that every motor vehicle infraction you’re involved in is tacked onto your driving record by the state where you’re licensed. Most U.S. states use a points system to codify the severity of various violations and keep track of just how terrible of a driver you are. You usually only get points for moving violations — when you do something illegal and dangerous while driving a vehicle — since they’re seen as more severe and potentially causing damage or harm than other violations. Those lesser violations, like parking tickets, busted tail lights or failure to keep your insurance paperwork in your car just come with fines.

Moving violations differ in severity, too. Driving 10 miles per hour (16 kilometers) over the speed limit might earn you a few points. Thirty miles over the limit? That could cost you closer to 10 points. Each state has a different formula for what violations are worth how many points, but here’s the bottom line: If you rack up a set number of points within a given period of time (usually 18 months), the state will suspend your license. For example, New York will suspend your license if you gather 11 points or more within 18 months. California will suspend you for four points in a year, six points in two years, or eight points within a three-year period. In California, each offense is worth fewer points than in New York, which is why the numbers don’t seem to match up.

The threshold for suspending your license is totally separate from your car insurance, though. We went straight to the source — a real live insurance agent! — to find out how those points affect your insurance rates, and why your insurance company might never even know about them.

Points and Your Insurance Rate

To find out how your driving record affects your insurance rates, we spoke to an insurance agent. He spoke to us off the record, because the corporate policies of major insurance companies forbid employees from talking about this stuff publicly (in fact, he’d face a hefty corporate fine if he did so).

The first thing to know is that insurance companies run a check on your driving record when you apply for a new policy, but rarely when a policy is renewed. That means there’s a big difference between your driving record when you already have insurance and your driving record when you’re getting new insurance or switching companies. Minor violations will most likely never show up on your insurance company’s radar. Major ones might slip through, but they tend to cause damage, which leads to an insurance claim, which leads to your insurer finding out.

We’ll assume, then, that you’re in the market for a new insurance policy. A minor moving violation will tend to increase your insurance premiums by 10 to 15 percent. Insurance companies look back approximately three years, so it will take a while for that violation to disappear — you can wait it out if possible before you apply for a new policy or switch insurers. You can also shave some points off your record by taking a defensive driving course. This varies by state.

What about major violations? Insurers have the right to refuse a policyholder, or refuse to renew a policy. A major violation is one of their favorite reasons to do this. If you’ve got a major violation on your record, or they know about one when your policy is up for renewal, you may find yourself without insurance.

That means the best way to keep your driving record from raising your insurance rates is to keep it clean. That means don’t drive like a jerk — and never drink and drive.

Author’s Note

I have a pretty squeaky clean driving record, so I had no idea a minor violation or two could affect your insurance rate so much. I was also unaware that a major violation was likely to get you dropped by your insurance company altogether. Makes sense, though — if you were an insurer, would you provide insurance to a convicted drunk driver? I was pretty surprised at how forthcoming the insurance agent I spoke to was, even if he did speak off the record. I guess you’ll never know unless you ask.

Content written by Ed Grabianowski and created in partnership with HowStuffWorks.com