How Would a Car Insurance Company Discover an Underage Drinking Ticket?

As for-profit companies with strict fiduciary obligations to their shareholders, auto insurance providers are known for raising their policyholders' rates in novel ways. If your car insurance rates have risen within the past few years, you're probably wondering whether they'll ever come down again. In fact, you may be wondering why your provider chose to raise your rates in the first place.

In many cases, the rationales for such rate increases are obvious. Drivers who are deemed to be at fault for car accidents that cause significant amounts of property damage should not be surprised to see their premiums increase following these incidents. Likewise, drivers who receive citations for serious vehicular crimes like reckless driving or driving under the influence must live with the consequences of their actions. After serious incidents like these, it's not uncommon for auto insurance premiums to increase by more than 50 percent in a single year.

However, some causes for such premium increases might seem dubious. If you're a young driver, you may be penalized for questionable decisions that you make outside of your car's passenger cabin. In recent years, a growing number of insurance companies have been penalizing young drivers who receive so-called "MIP" tickets. Properly known as "minor in possession" or "underage drinking" citations, these tickets are issued to minors who are found to be consuming alcohol in a variety of settings.

If you receive one of these tickets, you'll face substantial fines and possible criminal penalties. You may also lose any educational scholarships to which you're entitled and could even be kicked out of your higher-education institution. Depending upon the policies of the jurisdiction that issued the citation, you may be required to perform certain community service duties and attend alcohol-education classes. Failure to complete these requirements might result in the revocation of your driver's license, additional fines, and the potential for incarceration in a state prison or juvenile detention facility.

If you're cited for underage drinking, you won't be able to conceal your conviction until your 21st birthday. When you sign up for a new insurance policy, your carrier will conduct a standard background check that will almost certainly uncover your conviction. Since your insurer will assume that your propensity to consume alcohol increases your risk of driving while intoxicated, it may choose to raise your premiums by 25 percent or more. You'll have to accept these elevated rates until your 21st birthday.

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