Impact of Points on Your Licence on Car Insurance Premium

Auto Insurance

Car insurance companies keep track of their customers’ driving offences in order to calculate rates. Each auto insurance company has its own system, but excessive offences and claims can result in higher premiums. This is especially true if you’ve been convicted of a serious offence, such as a DUI or DWI.

Driver’s licence points are not directly used by insurance companies to determine quotes. However, if you receive licence points as a result of an incident behind the wheel, such as speeding, DUI, or distracted driving, your car insurance premiums will rise.

The most important thing to understand about auto insurance and points is that insurance companies do not base their insurance rates on a driver’s point total. Instead, insurers conduct their own background checks on each potential customer’s driving record.

An insurance company considers a number of factors when putting together a policy. The insurance company looks at your CLUE (Comprehensive Loss Underwriting Exchange) report as well as your MVR (motor vehicle report) to determine your overall driving record. These documents detail the claims and tickets you have received. If either document reveals a shady driving history, the driver’s insurance rates will rise.

Let’s look at some point-earning violations by state and calculate the potential penalty in the form of higher car insurance premiums.

What Exactly are Driving Licence Points?

Points are always a bad thing in the worlds of traffic law and auto insurance. Points are similar to demerits in that the more you have, the worse off you are. Accumulating points on your driver’s licence will cost you money and possibly your licence.

Most states in the United States have a point system that is linked to moving violations and collisions. Your state’s DMV keeps track of your infraction in addition to tracking tickets issued by police officers. If you earn too many in a short period of time, your driving privileges may be suspended or revoked. Although not every state employs a points system, all states keep track of each driver’s record and suspend or revoke licences as necessary.

Each time an at-fault collision or traffic violation occurs, the Department of Motor Vehicles (DMV) adds points to a driver’s record (speeding, texting while driving, illegal turns, and drunk or reckless driving). States assign points in a variety of ways, and not all states use a point system at all.

Is The Point System Used in All States?

States differ in how they assign points in the same way that each state makes its own traffic laws. Some people do not use a point system at all. Each state’s laws are distinct, and each point system functions differently. One point in California, for example, is not the same as one point in Alabama.

Furthermore, some states have simpler systems that automatically clear points after a certain amount of time, whereas others have more complicated systems. Furthermore, some states, such as Alaska, almost never remove points from drivers’ records.

Keep in mind that in most states, obtaining a second licence is easier after a first suspension. A DUI conviction will result in a suspended licence almost everywhere in the United States — and may make obtaining auto insurance difficult or impossible. In almost all states, if you are convicted of a traffic offence outside of your home state, it will be added to your in-state count.

States That Do Not Use Licence Points

At the moment, nine states do not use a points system to track traffic violations. Despite the fact that none of the following states use a formal points system, each tracks driving records and suspends licences on an individual basis based on violations:

  • Hawaii
  • Kansas
  • Louisiana
  • Minnesota
  • Mississippi
  • Oregon
  • Rhode Island
  • Washington
  • Wyoming

How to Save Money on Car Insurance When You Have Points on Your License?

Even if there is no accident or claim, licence points can raise car insurance rates. Traffic violations are reported to insurance companies via each driver’s Motor Vehicle Report (MVR), and premiums are raised accordingly. Some insurance companies request MVRs from their clients more frequently than others. Some companies will re-run the report at each policy renewal, which is usually every six months. Others will only consult the MVR when launching a new policy.

If you have expensive car insurance as a result of a citation or violation, consider one of the cost-cutting options listed below.

Take Action to Eliminate Your Points

Although it may be inconvenient, removing a ticket from your record should result in some insurance savings. Each state has its own method for removing licence points. The following is a brief overview of how to request licence point removal in major US states.

  • NY: Complete the Point & Insurance Reduction Program in New York, either online or in person.
  • NJ: Enroll in a New Jersey Defensive Driving Course, which is available online.
  • PA: Pass either a written or behind-the-wheel test.
  • OH: Take a defensive driving course.
  • GA: Completing a defensive driving course and submitting proof of completion is required in Georgia.

Submit proof to your insurance company after completing your required coursework or programme. If your insurance company is still penalising you, consider our next suggestion: shop around.

Car Insurance Quotes Should be Compared

This is the best recommendation we can make. Every insurance company will evaluate your driving history differently and charge you a different premium. Even if you have a clean driving record, getting car insurance quotes every six months is the best way to get the best deal. 


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