Most insurance companies have implemented surcharges for moving violations and at-fault accidents, which some call \u201cinsurance points\u201d. Insurance points may also be known as \u201caccident- or violation-related premium increases or surcharges\u201d. Your insurance premium is the amount you pay annually for your insurance policy.<\/p>\n\n\n\n
In some states, you may be turned down for insurance or face non-renewal if you have too many \u201celigibility points\u201d for traffic violations.<\/p>\n\n\n\n
Insurance points are given to drivers who have driving violations or offenses. These points are handed out by the Department of Motor Vehicles. The point system may differ slightly, or even greatly, from state to state. <\/p>\n\n\n\n
You can only get a certain amount of points on your license at a time. Most states are around 11 points total, which can usually be a couple of “minor offenses.” Some actions are major offenses that bypass points and suspend your license. Typically, drivers who lose their licenses with point problems are those who accumulate points over time and don’t get them reduced. <\/p>\n\n\n\n
The auto insurance point system is an important tool for insurance companies to determine how much to raise your rates because it shows poor driving. In most states, points are typically held on your driving record in the three to five-year range.<\/p>\n\n\n\n
Insurance points are a vital part of the calculation of auto insurance rates. These points are an indicator of your driving risk based on your driving history. However, because insurance companies are reluctant to discuss calculations, the nature of the insurance points system can be difficult to determine. <\/p>\n\n\n\n
Most point systems insurers use are proprietary, so they can vary dramatically by insurance company. However, many insurance carriers use the system based on the Insurance Services Office (ISO) guidelines.<\/p>\n\n\n\n
Insurers assign points to your insurance record for issues such as speeding tickets and other infractions, but they also ding you for claims. Once your point total hits a specific threshold, your premium will be \u201csurcharged.\u201d In other words, your rates are headed up. If your point total gets too high, you may be dropped altogether.<\/p>\n\n\n\n
For example, if your insurance company assigns three points for a speeding ticket for 10 mph over the limit and 2 points if you are caught running a red light, your insurance record will have 5 points on it. Insurance companies have surcharge schedules that detail the rate increase for various point totals. If their surcharge schedule indicates that a driver with 5 points would be surcharged 1.25, your rate is headed up 25% until the tickets fall off of your driving record, which will usually take three years.<\/p>\n\n\n\n
Insurance points are used to assess your eligibility for auto insurance coverage and for the calculation of rates. In many cases, the impact of insurance points lessens over time. As time passes, if you keep your driving record clean and don\u2019t file any claims, the insurance points on your record could be reduced, leading to a lower premium.<\/p>\n\n\n\n
It is always possible to see the specifics of your insurance carrier\u2019s rating system. Contact your insurance agent or your state\u2019s insurance regulatory body and request your insurer\u2019s surcharge schedule. All insurance companies must file their rates with the state insurance regulators.<\/p>\n\n\n\n