Many people know that your driving record can impact your car insurance premiums, but there is a difference between your official driving record and what insurance companies consider when calculating rates. If your state uses a driver’s license point system, insurance companies may consider these points when determining your rate. If you want to know if points on your license affect your insurance, this Bankrate overview will help break things down.
What are driver’s license points?
Many states use point systems to track driving infractions and assign weight to the severity of different incidents. You may receive points on your driver’s license after a speeding ticket or other moving violation, like running a red light. Many states will suspend your license if you receive a certain number of points. Which infractions receive points, the number of points for each and the threshold for license suspension all vary by state.
For example a speeding ticket in New York could result in three to 11 points, depending on how many miles per hour you were going over the speed limit. Reckless driving and texting while driving may earn you five points, while failure to signal could result in two points.
How do points affect your insurance rate?
Insurance companies evaluate your driving record when determining your rates, and this may include looking at your driver’s license points if your state uses a point system. Insurance companies typically charge higher rates for incidents that may also earn you driver’s license points, like speeding, distracted driving, reckless driving and driving under the influence.
Although sometimes referred to as “insurance points,” the systems used by insurance companies to track driving infractions are usually more nuanced than a simple point system and may vary significantly by carrier. While one carrier may raise rates substantially at renewal for a driver with a recent speeding ticket, another may have higher rates for drivers who text and drive. Even if your state does not use a driver’s license point system, you will likely still see a surcharge when your policy renews for driving infractions.
Having points on your driver’s license will also impact your car insurance rates if you decide to switch carriers or obtain new car insurance. Car insurance companies will likely ask about your driving record during the quoting process before running your official motor vehicle record and agreeing to offer you coverage.
Other consequences for driver’s license points
Each state has its own rules regarding license points. However, if you acquire a lot of points within a specific time frame, you may have your license suspended or revoked. For example your license may be suspended in New York if you obtain 11 or more points within 18 months.
If your license has been suspended, you will likely be seen as a high-risk driver by insurance companies, so in this way points do affect your insurance directly.
If you’re high risk, you may be required to obtain SR-22 insurance. An SR-22 is a form that a driver may be required to file with the state to verify that your state’s minimum mandatory auto liability requirements are being met. An SR-22 is usually required for drivers who have had their license suspended and want to reinstate it.
Carriers may also cancel or nonrenew your policy as a result of driving infractions or a license suspension.
Can I get rid of points on my license?
States may have different policies surrounding license points. Points may fall off your license over time, or you may be able to get them removed by taking an approved defensive driving course or attending traffic school. If you have points on your license, you may want to check with your state’s department of motor vehicles on its policies surrounding point removal. However, while the points may be removed from your license, your violations are still part of your permanent driving record.
Even if a point is removed from your license, the offense related to the point may still be considered by your car insurance company. That being said, insurance companies typically consider driving infractions for three to five years when determining rates, depending on the carrier and violation. Serious infractions, like DUIs, may be considered for longer.
How can I bring my insurance rates back down?
If your car insurance rates go up due to the points accumulated on your driver’s license, there may be ways that you can bring your rates back down. Here are a few ways you might be able to lower your rates:
- Take a driving class: In select states, insurance companies may offer a discount for taking an approved defensive driving or driver’s education course.
- Take advantage of other discounts: Most car insurance companies offer a number of discounts for eligible drivers. Choosing a carrier with many applicable discounts may help you save. Common discounts include bundling, paid-in-full and good student.
- Shop around for a new policy: If you have done everything you can with your current insurance policy and your insurance is not going down, you could consider comparing quotes from other carriers to see if another company offers you a lower rate for your circumstances and coverage needs.
- Improve your credit: Not all states allow for the use of credit as an insurance rating factor, but in states that allow it, improving your credit may bring down your car insurance rates. Carriers typically see drivers with poor credit as riskier to insure and usually raise rates for these drivers as a result.
- Increase your deductibles: If you’re still having trouble finding an affordable rate, you could consider increasing your deductibles. Higher deductibles may lower your premium, but keep in mind that you have to pay higher out-of-pocket costs in the event of a claim.
Frequently asked questions
In states that use a point system, each ticket you get may add points to your license. Moving violations like speeding are more likely to add points to your license, whereas non-moving violations like a parking ticket should not impact your license or record at all.
States track your accumulated points for various safety reasons, and getting too many points could lead to mandatory driving classes or license suspensions.
Sometimes, people use the terms driver’s license points and insurance points interchangeably because insurers look at your ticket history when determining your insurance rates. In reality, points don’t affect your rates directly. Instead, the infractions that resulted in the points on your license will. Each insurer weighs different infractions differently, so there is more of a relationship between your rates and specific infractions than your rates and your license points.
Discount types and amounts will vary by insurance carrier, and eligibility requirements may also vary. For example, one carrier may offer savings of 10 percent for bundling, while another may offer 25 percent.
- Bundling discounts
- Good student discounts
- Professional and affiliation discounts
- Payment discounts
- Safety feature discounts
The average cost of car insurance in the U.S. is $2,014 per year for full coverage and $622 per year for minimum coverage. However, your rates may vary dramatically based on personal rating factors like your location, vehicle type, driving record and, in some states, your age, gender and credit history.