A ticket of any kind is bad enough—the extra money, the time spent in traffic court or diversion, the hassle. But perhaps the worst part of a ticket is the potential for increased insurance rates. Different types of tickets have varying effects on different demographics and the rules are by no means standard. It is, in a word, confusing. But fear not: Quoted has the low-down on what kinds of tickets really raise insurance rates—and for whom.
The effect of a ticket on your insurance rate:
It seems insurance companies know so much about us—our marital status, the ages of our children, our income—we assume they’ll know about all of our traffic tickets, too. Maybe you, like us, imagine some kind of direct police-to-insurance company reporting system in which, before the ink on a ticket is even dry, our premiums go up. But the reality is a little more complicated, and this complication can actually work in the consumer’s favor.
Auto insurance companies must actively search for blemishes on their customers’ records, and though they’re known for their investigative abilities when it comes to big issues like fraud, even national insurance companies have to channel their resources based on what’s most likely to happen.
Speaking to The Auto Channel, Laura Adams, a senior analyst for InsuranceQuotes.com says, “Younger people have a bad reputation for being risky drivers and typically face additional scrutiny from insurance carriers. Most carriers check a young driver’s record every six months, but won’t regularly check an older driver’s as these checks can be costly—and older drivers typically are safer drivers.”
It turns out that getting a ticket in the past five years increased car insurance rates for just 19 percent of US drivers. Adams says, “Insurers typically don’t know as much about you as you might think. Often times, unless you’re a young driver, they are unaware of minor tickets and violations you receive on the road.”
And even if your insurer does find out about a traffic ticket, there’s still a chance they won’t increase your insurance. Of course, the type of ticket matters: speeding 5 miles over the limit? Sure, you might get a pass. But a DUI? Not only will you certainly see a rate increase, you could lose your coverage altogether.
Drivers who receive the most attention from insurance companies:
Insurance companies are big on statistics—their entire business model is built on which types of people are most likely to do which types of things with which types of outcomes. Insurers pay strictest attention to those most likely to make a claim: the riskiest drivers receive the most attention. So who do you think is the highest-risk age group? Teen drivers, right? Wrong.
In fact, The Auto Channel reports that Americans between the ages of 30 and 49 receive the most tickets. This group therefore receives the most scrutiny from insurance companies and is most likely to see their premium rise after a ticket. Insurance industry studies report that in the past five years, 31 percent of 30-49 year olds received a moving violation, while just 25 percent of 18-29 year olds were ticketed. All drivers under the age of 50 are three times more likely to face higher premiums after a ticket than those 50-64. And while lower-income families are, on a whole, subject to more costly insurance, it’s actually higher-earning households (with an annual income over $75,000) that are more likely to have been ticketed in the last five years.
Is your policy at risk if you don’t report a ticket to your insurer?
If you’re searching for a new car insurance policy you must disclose all tickets during the time period the insurance company requests (usually the last three to five years), or risk trouble down the road. But if you have an existing policy, you most likely won’t need to report tickets or other violations. Remember that each insurance company is a private entity with individualized policies, so always double-check the fine print.
The most expensive tickets:
So, if you’re in the unfortunate 19 percent of drivers who will see a rate increase after a ticket, how much more can you expect to pay? From Bankrate, the average yearly rate increases for different violations:
- Reckless driving (which includes texting in some states): 82 percent
- Careless driving: 27 percent
- Speeding: 21 -30 percent, depending on how far over the limit
- Running a red light, ignoring a stop sign, and violating a no-right-on-red sign: 19 percent
- DUI/DWI: there isn’t a reliable percentage because most drivers lose their insurance since, as a State Farm spokesman told Bankrate, insurers often “can’t charge enough in premiums to match the risk.”
Do parking tickets affect insurance?
Nope. That is, no–as long as you pay them. Parking violations are not listed on your driving record as they are not “moving” violations nor are they risky behaviors which pose a danger to other drivers, so they cannot impact your insurance premiums. However, failure to pay parking tickets may, in certain municipalities, lead to a suspended driver’s license, and if you happen to drive on a suspended license, that is considered a moving violation, which could result in increased insurance rates.
A closer look at the numbers:
Let’s take an average, hypothetical driver with an average, hypothetical insurance rate of $2,000 per year and see how much more our driver could end up paying after different tickets:
- One reckless driving ticket (which could mean just one incidence of texting) could add $1,600 to our driver’s yearly premium
- Running just one red could add $380 per year
- One speeding ticket could increase the premium by $600 per year
- A second speeding ticket could turn that original $2,000 a year premium into over $3,400 a year
These prices can make the cost of the actual ticket seem tiny by comparison.
If you’ve gotten a ticket of any type, and your insurer has increased your rates, it never hurts to shop around to see if another carrier can offer you a better rate. You can even practice a little negotiation and go back to your current insurer with quotes from other companies to see if they can match the rates. And as the old saying goes, prevention is the best medicine. So drive safe.