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Insurance Shopping Tips

Your Driving Record & Your Insurance Rate

Auto insurance companies take your driving record very seriously. In fact, your premium is often influenced by how many violations or accidents you've had.

In most states, the motor vehicles department has a "point" system, which is used to track your driving record. Usually, the various types of infraction (moving violations, parking tickets, at-fault accidents, driving under the influence, etc.) are assigned a certain point value. If you are found guilty of one of these infractions, the appropriate number of points is added to your driving record. The more points you have, the worse your record.

An auto insurance company has the right to review the driving record of anyone who applies for an auto insurance policy from that company. They do these for two reasons:

  1. To determine whether you meet the insurer's standards of insurability (i.e., whether you will be issued a policy at all).
  2. To evaluate your risk potential (i.e., how much your insurance will cost).

However, each insurance company has its own method of evaluating applicants, so the points on your driving record may or may not have a direct impact on the rates you pay for auto insurance.

Once you are issued a policy, your insurer probably has the right to review your driving record at any time (depending on your state). Of course, few insurers have the resources or the inclination to run daily checks on the driving records of every policyholder, so the frequency of these checks actually may be quite low. There are, however, certain times when you can be relatively sure an insurance company will be checking your record. These include:

  • When you initially apply for coverage
  • When you request a change to your policy (increased coverage amounts, etc
  • When you add a vehicle to your policy, or change the covered vehicle
  • When your policy comes up for renewal

If a review of your driving record uncovers negative information, there's a chance your insurance rates will increase. Insurers typically use their own "point" system to determine the amount of the increase (if any). These systems can vary, though most insurers use a system based on the Safe Driver Insurance Plan, which is issued by the Insurance Services Office (ISO).

The Safe Driver Insurance Plan lists the different types of auto accidents and moving violations, and assigns a "point" value (from 0 to 4) to each type based on the severity of the incident. Under the Plan, as you accumulate points, you are assessed surcharges that generally result in higher insurance rates. The number of points charged determines a premium increase.

Please note that this description/explanation is intended only as a guideline.

Original article can be found here at Insurance.com