Car Insurance and The Good Driver

By: Mary Thompson, Capstone President, January 22, 2015

Most insurance companies like to reward good drivers. Let’s face it, being a good driver to an insurance company is like hitting the lottery; no at fault claims, just a nice monthly payment for them to bank… After all, car insurance is really just an insurance company taking a gamble on individuals driving skills. The carrier just hopes they don’t have to pay out big. Much like a Las Vegas casino tries to predict the over under in a football game, insurance companies try to predict the likelihood of claims. But as we all know, it isn’t always easy to bet the winning team or know which way the game will go, the same goes for banking on a good driver.

I am a good driver MOST of the time…

So, you are headed out the door and realize you forgot to get the document you needed for your morning meeting. Now you have to quickly run to the office before your 9:00am clear across town. So, what do you do? Call the client and risk upsetting them, or try and be superman and get there in the 45 minutes you have by ignoring the rules of the road and the speed limit?

A good driver in the insurance company’s eyes would call the client, but come on, we have all been there; the morning isn’t going your way so you take the fast route. You drive faster than normal, run the yellow light, California roll through the stop sign, and whatever else it takes to make it in time… BUT, then you notice the police officer in your review mirror with the pretty flashing lights. Great! Now on top of your bad day, you’re getting a ticket, too!

But wait, what will this do to my insurance premium?

Well that depends, is this your first time? If you answer yes you will likely be able to request traffic school or get the ticket reduced. The points will not go on your driving record and you can move on with your life after a fine and a nice lesson learned. Next time, you will call the client to tell them you are running late, hit traffic or whatever clever idea you come up with that doesn’t involve ruining your driving record. In this case, more then likely your premium will stay the same.
Now, if this is a regular occurrence that is a different story. More than likely, you will begin to see a slow increase in premium with each infraction. The reason for this is the insurance company will see you as more of a risk to insure or (cough cough) a “bad driver”. Once you are marked a bad driver, it is hard to come off that list, and it usually takes years. Basically it boils down to matching the premium you pay to your driving risk as a customer.

How long before my bad driving incident will cost me?

Well it can take a little bit for your driving history to catch up to your insurance premium. The reason it can take some time is because first you have to be convicted of the offense which usually takes 90 days. Then, if you are convicted, the DMV has to place it on your driving record which will take approximately 30 days. Once it hits your motor vehicle record (MVR) the insurance company will find out. But they may not charge you right away; it usually happens when you go to renew your insurance next year or try to switch your coverage.

How does the insurance company know I got a ticket?

Simple- they don’t unless you are convicted, and it goes on your MVR through the DMV. This is where the beauty of being a good driver MOST of the time comes in quite handy. If the ticket is reduced to say a parking ticket, or you are allowed to take traffic school, then your insurance company will more than likely not find out. BUT if it does go on you MVR then you can expect them to know if they ever decide to check your driving record with the DMV.

One of the most effective ways to save on car insurance is to follow the rules of the road, and of course not get tickets for speeding and other driving violations. Next month I will talk about what at fault accidents mean for your insurance premium.