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Car insurance companies determine individual rates depending on a variety of factors, such as sex and age of the driver, the number of miles normally driven, the type of car, and geographic location. They also take into consideration something known in the industry as points, which are a reflection of an individual’s driving record.
Points on car insurance are not the same thing as points on your driver’s license. Every state has a point system by which it tracks an individual driver’s record of moving violations. Some states start at zero and add up points, while others start at a predetermined amount of points and subtract down.
Regardless, your insurance company has developed its own point system which may or may not be dependent upon your state system.
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Speeding tickets are among the most prevalent of point-accruing conditions for most insurance companies. The thing with speeding tickets is that, while states determine points by comparing the extent to which the speed limit was exceeded, the insurance company does not.
They view all speeding tickets the same way — as a dangerous activity regardless of the speed.
A common rule of thumb is to add three points for the first speeding ticket and two points for subsequent tickets.
Although not the most common, the most severe condition to accrue points is to be caught driving while intoxicated. Because of the dangerous nature of this offense and the potentially huge liability an insurance company could face, DWI infractions are taken very seriously.
Most insurance companies assign points for DWI violations based on a graduated scale. The more DWI incidents in a driver’s history, the more points are increased for subsequent violations.
Other conditions that cause points on car insurance include minor moving violations, such as:
- Failure to wear a seatbelt
- Major moving violations, like fleeing the scene of an accident
- Both no-fault and at-fault accidents
How insurance companies assign points from these conditions varies from one provider to the next.
Regardless, a higher point value on your insurance policy always results in a higher premium. Insurance companies know that the riskier your driving behavior is, the more potential you have to file a claim. Points are simply means of tracking that.
Fortunately, unless you are a chronically poor driver, insurance companies do allow the reduction or elimination of points on an insurance policy. Reduction methods vary as much as accrual methods.
However, there are some general guidelines that most insurance companies apply:
— Time and Safety Method
First and foremost, you should be able to reduce points on your insurance policy by maintaining a clean and safe record for 12 consecutive months. In all but the most serious of infractions, a year of good driving will go a long way in reducing points or eliminating them completely.
— Take a Class
Depending on the conditions that caused the points, you may also be able to reduce them by taking part in a safe driver course. For example, points accrued through an at-fault accident are based on the assumption that your carelessness or lack of driving skills is at least partially responsible.
The insurance company assumes that your issues can be corrected through a safe driver course, so they are willing to reduce your points if you complete such a course. Sometimes, safe driver courses will also help reduce points for DWI infractions.
If you dispute points, you can always retain an attorney to negotiate on your behalf. Using an attorney isn’t always the wisest course of action, but if all else fails and you’re unable to reach a fair settlement with your insurance company, an attorney may be necessary. With a skilled one, it becomes easier to reach a compromise that both you and your insurance provider can live with.
The point system is one of those unfortunate realities of life where car insurance is concerned.
Insurance providers must protect their interests in every way possible, including tracking your driving history and adjusting your rates accordingly.
The best way to keep premiums low is to know what causes points on car insurance and then avoid those activities. In other words, drive safely and legally at all times.
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