Understanding Car Insurance and the Points System

Understanding Car Insurance and the Points System

Understanding Car Insurance and the Points SystemWhen you are applying for a new car insurance policy or when you make changes to your current policy, your insurance company will more than likely take a look at your driving record.  By looking at your driving record, the car insurance company will decide whether or not it will actually issue a policy and, if it does, your driving record will help the company decide how much to charge you for insurance coverage.

Points and Your Driving Record

In most states, your driving record will reflect a certain number of points that you have received from driving infractions.  For each infraction, such as a parking ticket, a speeding ticket, or a failure to stop ticket, you will receive a certain number of points.  These points are cumulative and are added to your record with each infraction.  After a certain number of years after the infraction, however, the points will be dropped from your record. If you acquire too many points at one time, the State may suspend your driving privileges or require you to take driver safety courses.

Points and Your Insurance Rates

When looking at your driving record, the points assigned by the state may or may not have an impact on your rates.  This is because the insurance company is more likely to look at the actual infractions and assign its own points values to those infractions. 

The points system utilized by many insurance companies is based on the Safe Driver Insurance Plan that has been developed by the Insurance Services Office.  With this system, each infraction receives a point value ranging from zero to four points each. The points the infraction receives depends upon the severity of the infraction.  The more points you receive through the system, the higher your insurance rates will likely be.

Of course, each insurance company has its own methods for determining insurance rates.  Therefore, it is a good idea to discuss this with your insurance agent ahead of time so you are familiar with the system your company uses.  Also, it is important to keep in mind that insurance companies don’t check on your record every day.  Rather, they may look at it every six months when your policy is renewed, when you make a change or an addition to your policy, and when you first apply for a policy with the company.  Therefore, you aren’t likely to see an immediate change in your insurance rates following a traffic violation.


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