How Does Your Driving Record Affect Your Car Insurance Rates?

The most common question after getting into an accident is, “will this affect my rates?”

The easy answer is yes, accidents affect your car insurance rates. There are some situations in which one accident won’t affect your rates, but generally, just one claim will cause your rates to go up.

New York is a no-fault state, which means that if you are involved in an accident and the other person is at-fault, your own policy will still pay you for your damages.

The good news is that New York has one of the lowest average increases in premium after one accident. So even if it does go up, it shouldn’t go up as much as it would in another state.

In auto insurance, there are two categories of driving history that companies look at: claims history and violation history. They’ll usually look back 3-5 years at both categories to determine your rates. In addition, they’ll also look at your insurance history to make sure you’ve had continuous coverage.

Claims History

There are two broad categories of drivers for insurance companies: high-risk drivers and low-risk drivers.

HIGH-RISK DRIVERS: People in this category have had multiple claims. If you’ve had multiple claims in the past 3-5 years, you’ll likely be paying higher rates anyway. If you have another claim, your rates will likely skyrocket. Depending on the company you’re with, you might even get a nonrenewal notice, which means you’ll need to purchase insurance with a nonstandard company.

Most insurance companies don’t accept new customers who have had more than 2 or 3 claims in the past 3-5 years.

LOW-RISK DRIVERS: People in this category have either never filed a claim, or haven’t had one in the past 5 years. If you have a claim, your insurance will probably still increase, but it won’t be as much than it would be for a high-risk driver.

A lot depends on the specific company you’re with and how severe the accident was. If it was an accident that paid out tens of thousands of dollars or more, your rates will go up more than if it was a minor fender bender.

Accident Forgiveness?

If you are considered a low-risk driver and haven’t had any claims in the past 5 years, you might qualify for accident forgiveness. This is a program offered by many insurance companies that guarantees your rates won’t go up after your 1st accident on the program.

Not all companies offer this, and it does cost a bit more to have this on your policy, so check with your insurance agent to see if you qualify.

If you do have prior claims, then you’ll need to go 3-5 years without an accident to see your rates go down.

Driving History

Insurance companies also look to see if you’ve had speeding tickets or other traffic violations, such as running a red light. The same 3-5 year time frame applies here. Companies classify violations differently, depending on the severity.

For example, one speeding ticket for going 5-10mph over the limit won’t cause your rates to increase as much as driving 25mph over the limit. Multiple speeding tickets will classify you as a high-risk driver, causing your rates to increase.

DUIs also have a huge effect on insurance rates. If you get a DUI, the state will likely require you to get an SR-22. This is a certificate that the insurance company sends to the state, proving that you have insurance. They simply want to know that you are following the legal requirement to carry auto insurance.

The SR-22 form isn’t expensive, but needing one means you’re classified as a high-risk driver, so expect your rates to go up quite a bit.

SR-22s don’t cost a lot of money themselves, but not all insurance companies offer these. They also carry with it the fact that your driving history is risky, resulting in high rates.

Insurance History

In addition to your driving and claims history, your insurance history is also important in determining your rates.

Instead of the 3-5 year time frame that most companies use, they mainly just want to know if you have had insurance over the past 12 months. If you’ve had a lapse in coverage, your choice of auto insurance companies will be limited because most require that you have active insurance.

Always make sure that you have an active insurance policy in-force. The penalties for driving without insurance are severe in New York. In addition to having to pay a steep fine, you could also be responsible for having to pay for the other person’s damages completely out-of-pocket.

Maintaining a good driving record really pays off when it comes to what you pay for auto insurance.

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