You probably know that your driving record affects your car insurance rates, but do you understand exactly how? In this article, we’ll explain three ways your driving record affects your car insurance. This can help you make more informed decisions while you drive as well as when you’re purchasing insurance. Remember these three factors when you’re looking for ways to reduce the cost of your insurance!
#1. Traffic Tickets
Driving habits that result in tickets aren’t just dangerous – it’s also expensive! Depending on the seriousness of the ticket, even one can have a major impact on your insurance rates.
Getting a photo radar ticket won’t impact your rates (as it can’t be proven you were the one driving), but any other ticket has the potential to impact your rates. Usually, an insurer will forgive the first ticket unless it’s a major infraction. Get more than one ticket and you will see your rates go up!
If you get a major infraction (speeding more than 50 kmph over the limit, driving under the influence, stunting or racing or other serious driving offences) you will see your rates steeply increase. Some insurers may not offer you any coverage except the minimum liability coverage. If you have multiple serious infractions, you will likely have trouble finding insurance and will pay very high rates.
To keep your driving record clear of tickets, do the following:
- Obey the rules of the road.
- Drive calmly and courteously.
- Give yourself lots of following distance (4 seconds or longer if conditions are poor).
- Come to a complete stop at red lights and stop signs.
The bonus is this also helps you avoid accidents!
Most common traffic tickets are easy to avoid – it just requires proper attention and caution behind the wheel. You may also take a driving course or drivers training if you want some help familiarizing yourself with the rules of the road.
Some common examples of tickets are failure to stop at stop signs, improper turns, and speeding. Just about everyone has heard the old public service campaign: “Speed kills.” Research has proven this to be true: for every kilometre per hour increase in your speed there’s an increased chance of an accident.
Tickets can impact your driving record and car insurance rates for years – so drive safely!
#2. Accidents
Accidents on your driving record will cost you immediately unless you’re not at fault. If you cause an accident or if who is at fault isn’t clear, your insurance rates will increase. A single accident can impact your insurance premium for five years – or longer, in some cases.
The exception is if you have some type of accident forgiveness on your policy. This ‘forgives’ your first accident if you’ve been claims-free. However, you will need to stay with the same insurer until the accident is off of your driving record, as other insurance companies will see it.
#3. Driving and Insurance History
Often, new drivers or infrequent drivers will let their car insurance lapse if they’re not driving. Why pay for insurance if you’re not on the road? But maintaining a consistent driving and insurance record helps prevent your insurance premiums from rising sharply.
For younger drivers, this could mean being added to a parent’s car insurance policy. This can mean an increase in the annual car insurance premiums for the parents, but it will probably cost you a lot less than purchasing separate car insurance. The key is to find a plan that fits your family and your budget while helping your child to stay insured. The longer your child is on your plan the longer his or her driving record and the better their rates when they do eventually go off and get their own car insurance policy. Talk to your broker about the best options for your teen and your family.
If you drive infrequently, it’s still important to maintain your insurance coverage if you own a car. Alberta mandates liability insurance coverage and if your vehicle is parked on public streets or it is driven on public roads, this protection is required by law. The amount you drive does affect your insurance rates so if you don’t drive very much you should have lower premiums. If someone else in your household drives more often you could be added on as an additional driver instead of having your own separate policy.
For those who don’t have a car to insure, what you do will depend if you plan on purchasing your own car in the future. If you do plan to get another vehicle or use ride- or drive-sharing platforms you may want to consider getting liability insurance to ensure your insurance history is consistent and protect yourself while driving.
What if I can’t remember?
For many drivers however remembering whether or not they got a speeding ticket or other violations in the last three years is tough. Life is busy and not everyone can remember those details. So when asked they’ll tell their independent insurance broker they have a clean driving history. Problem is your broker can’t issue a new policy without first verifying the information you’ve provided. In Canada brokers and insurance companies use the AutoPlus system to track auto insurance claims. The database has access to more than 30 million claims over the past 15 years and by checking a driver’s license or policy number the insurance provider can establish your claims history and your level of risk for insurance purposes.
For this reason it’s not a good idea to hide past traffic tickets or insurance claims from your insurance broker. They’ll have to check this information anyway and if you end up omitting vital information you could actually be denied insurance coverage. Once you’re denied coverage it becomes much more difficult to get adequate insurance from a different company.
Get the right coverage with the right information
If you have questions call your insurance broker. By asking questions and expressing your concerns, your broker can help you understand how your driving record affects your premiums. They will work with you to discover how you can reduce your rates and find cost-effective coverage.