Your auto insurance costs are dependent upon several factors. In addition to your age, physical location and vehicle make, your annual premiums are also governed by various demographic factors and life decisions. If you’re a student, you may qualify for a “good student” discount as long as you can keep your GPA above a pre-determined level. Likewise, you may qualify for significant rate reductions on your total insurance costs provided that you “bundle” your auto insurance policy together with your homeowner’s and life insurance policies. Most insurance companies offer these bundles to qualifying homeowners.
Despite all of these new bells and whistles, your auto insurance premiums are still certain to be affected by the most important factor of all: your driving history. American auto insurers use a relatively straightforward “points” system to determine how much their customers ought to pay for insurance. These “points” are identical to those used by the various state motor vehicle bureaus.
In fact, most auto insurance companies calculate their customers’ auto insurance premiums using annual reports from the motor vehicle bureaus in their home states. Since most of these departments communicate freely with one another, insurance companies are able to obtain information about “out-of-state” vehicular crimes and accidents in which their customers are involved. In other words, you’ll be held accountable for the mistakes that you make behind the wheel no matter where you are when they occur.
Depending upon the laws in the state in which they’re issued, most minor moving violations account for one or two “points” on your license. Such violations could include low-level speeding tickets and basic transgressions like “failure to signal.” More serious moving violations might include serious speeding tickets, red-light violations and reckless driving. If you’re pulled over for exceeding the posted speed limit by more than 20 miles per hour or swerving through multiple lanes of traffic, you can expect to receive three points on your license.
The precise effect of a three-point violation on your annual insurance premiums will depend upon the policies of your insurance provider. In general, you can expect such a violation to boost your premiums by between 50 and 100 percent. If you’ve been cited for additional moving violations within the past three to five years, you should expect your premiums to rise by 100 percent or more. If your driving record is otherwise clean, your premiums might rise by far less than this amount.