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How to Manage Car Insurance Points

How to Manage Car Insurance Points

Car insurance points are not the type of point system where you want to get a high score. These points are based on the number of accidents and violations you have while on the road. Insurance companies use these points to gauge how much of a risk you would be to insure, thus affecting your premiums and how much you pay for insurance. Too many car insurance points can result in you even getting denied coverage altogether. While there aren’t any ways to directly mitigate how many points you have, you can prevent others from being added.

What Are Car Insurance Points?

We’ll get into the specifics later, but car insurance points are an entirely different animal than the points that are added to your driver’s license by the DMV for similar reasons. As the name suggests, insurance points are entirely managed and constructed by your car insurance provider. Every provider has different point systems, but they all function the same way. Too many car insurance points won’t cause any legal penalties like fines or jail time; it will just make finding affordable car insurance a whole lot harder. No one wants to be a high-risk driver that pays more than average for car insurance, so that’s why it’s important to think about your car insurance points every once in a while.

What is The Difference Between Points on Insurance And Points on a Driver’s License?

Several drivers often confuse the two types of points they can accrue on either their car insurance or driver’s license. That’s a good basic way to remember the two –one goes on your insurance while the other goes on your driver’s registration record. Remember that there are two different points systems in play here, but both function similarly. Car insurance points are only recorded by your insurance provider and add up with each traffic violation or conviction. From there, all insurance companies now have a sort of score of your risk. If it’s high, as suggested by the number of points, then so will your insurance premiums.

Driver’s license points play a role in determining car insurance rates too. But unlike insurance points, too many license points can result in legal penalties like license suspension, fines, and even jail time if too many accumulate. The more severe the infraction, the more points you receive. To speed up the process of removing driver’s license points, you may also pay fines or take defensive driving classes in most states. Your driving history is also taken into account by most insurance companies when figuring out how much your rates may be. Defensive driving courses are useful, as those who have a clean driving record need methods to lower their insurance premiums.

How Can Points Affect Your Insurance Rate?

In this context, points and accidents are interchangeable terms as they both cause an increase in car insurance rates. How much the increase depends on the accident or traffic violation and their respective amount of points. For example, let’s say that you pay $235 a month for car insurance –that’s around the average. After something like a speeding citation, you may find that your rates increased by around $30 a month. Something as serious as a DUI conviction can cause your rates to increase by at least $70 in a month. Accidents can cause an increase of about $50 a month at the same time. Of course, insurance points will also be added along with driver’s license points after the accident or violation.

How Long Are You Stuck With Car Insurance Points?

Car insurance points follow you, so if you were to try to get new insurance, any new insurer will see them and charge you accordingly. The length of time that your points stay on your insurance history varies from company to company, much like how many points you earn. The examples in the previous section were the insurance rates of State Farm. If you have a different insurance provider, then the odds are your numbers will look different. However, if we were to average it out, points stay on your insurance for anywhere from three to five years. There is nothing you can immediately do to make them go away. Instead, the process of removing car insurance points isn’t much of a task but more of a waiting game while staying out of additional trouble.

What Can You do to Remove Insurance Points?

There is no immediate way to remove insurance points, except for maybe taking a defensive driving course to lower the cost of your premiums. That, however, will not remove the points themselves. You will just have to avoid further violations and accidents by driving more safely and cautiously. It’s best if driving habits like these become natural due to the fact that you would have to do this for at least three years when the points are finally removed on their own. When it comes to major violations like a DUI where your driving privileges are compromised, you should do everything first to get back on the road, then worry about the points as you become a safer driver. There is no way to resolve insurance points without paying higher premiums, so you will have to put up with it for the time being. This is truly how you manage car insurance points.

What Other Things Can Lead to Insurance Points?

Aside from accidents and traffic violations, there are some other driving mishaps that can lead to insurance points. However, a lot of these are preventable and can be easy to manage.

Points can also be assigned due to:

  • Insurance claims - Making an insurance claim may raise your premiums even though your insurance is fulfilling its main purpose. It’s a way that insurance companies can compensate for themselves after providing a payout. You don’t want filing claims to be a regular thing as it suggests a high-risk driver.
  • Hazardous vehicle - Driving an unsafe car that fails a safety inspection can lead to issues with insurance as they don’t wish to insure such a risky vehicle that is a claim just waiting to happen.
  • Bad credit - Many insurance companies look at their policyholders’ credit scores to gauge their financial responsibility since insurance is all about making your payments on time. They can charge you more if they feel your score isn’t great.
  • Using a personal car for work - Using a car for business purposes without the proper commercial insurance can lead to issues with the insurance company.
  • Car insurance lapses - You never want your car insurance to expire or lapse while you are still driving. Driving uninsured in itself is a ticket to points and large premiums. Since car insurance is the law in most states, you are expected to carry it and keep it active at all times.

Even if you have a less than favorable driving record, Insurance Navy can help you find affordable auto insurance. Get a free car insurance quote online or call us at 888-949-6289.

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