How does your driving record affect your insurance rate?

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.

For more information on car insurance, head to the links on the next page.