Insurance rates are not just figures arrived at arbitrarily or just for the sake of profits by insurance companies. On the contrary, these are figures set after much calculation and consideration. Insurance companies are protecting you from losses arising from certain risks and the higher the risk you carry the more costly your coverage will become. Certain actions or situations increase the risk of incurring accidents or point on your susceptibility to an accident which in turn drives up the insurance rates. Here is a look at some of the common factors which can affect your insurance rates.
Drunk Driving (DUI & DWI)
Driving under influence or when intoxicated is a serious issue and besides facing the fines and covering costs involved, a DUI affects your driving record staying on it for about 3-7 years. This, in turn, affects your insurance rates because it is viewed not just as recklessness but as a risk brought about by an intentional act since you are aware of the risk you pose to others and yourself when you drive while drunk.
Given the high likelihood of crashing or causing an accident in a DUI situation, you will be viewed as a high risk because of your poor judgment and attract high rates and you could easily face an extra $5000 per year on insurance costs. In a worst case scenario where you have been charged with two or more DUI charges, your license could be revoked and most insurance companies turn you down for cover further limiting your options to expensive policies.
Traffic violations point at reckless driving and an increased risk to be involved in an accident. This attracts higher insurance rates and varies depending on the extent of the violation. For example, if an individual was found over speeding by 50km/hr past the speed limit they will attract higher rates compared to speeding tickets for 10km/hr over the speed limit. Repeat offenders attract even higher penalties and can also face the risk of being dropped by their insurance companies. With every violation, you attract an increase in rates and you could easily end up with a 25% increase in your insurance rates.
Most people worry about whether getting parking tickets will show up on their driving record and thus drive up insurance costs. In reality, parking tickets do not show up on your driving record as it is not a violation done while you were inside a moving car. However, if you do not pay for them in time you attract fines and other penalties like suspension of your license plate as well as driving license. To insurance companies, this points to recklessness and irresponsibility on your part and attracts higher rates.
Every time you're at fault in an accident you increase your risk factor and in turn your insurance rates. Some companies have plans that may forgive your first at-fault accident over a number of years. Subsequent accidents incur higher rates. Given that accidents stay on your record for six or more years, you will be paying premium rates for long just became of one or two accidents where you are at fault.
The best way to keep your insurance costs down is to driving safely while avoiding any traffic violations.