How Your Driving Record Affects Your Car Insurance Premium?

In The Maritimes and everywhere else, your driving record is one of the most significant factors that insurers use to determine your car insurance premium. Your record reflects your history on the road, including any tickets, violations, and accidents you’ve been involved in. Let’s explore how different elements of your driving record can impact your car insurance premium and what you can do to maintain affordable rates.

How Is Your Driving Record Calculated?

Insurance companies use a numbering scale to rate your driving record. Typically, each year you drive with a clean record (with no violations, incidents or at-fault claims) equal to a point. You will often receive a top rating if you have a clean driving record for six or more years. So, the cleaner your record, the lower your premium is likely to be. In contrast, a history of frequent incidents can lead to higher insurance costs or even difficulty obtaining coverage.

How Do Tickets and Traffic Violations Impact Your Driving Record?

Traffic tickets, ranging from minor speeding infractions to more serious offences like reckless driving, can significantly affect car insurance rates. Here’s how different types of violations typically impact your premium:

Minor Violations (e.g. Speeding or Running a Stop Sign)

• Insurers may increase your premium if you have one or more minor violations on your record. The increase can vary, depending on the severity of the infraction and whether it was a one-time event or a recurring issue. While a single speeding ticket may not cause a drastic hike, multiple infractions within a short time frame can raise red flags for insurers, indicating that you’re a high-risk driver.

Major Violations (e.g. Reckless Driving or DUI)

• Serious traffic violations like reckless driving, driving under the influence (DUI), or street racing can result in substantial premium increases. A DUI conviction, for instance, may cause your rates to more than double because insurers view this behaviour as highly risky. In some cases, a significant violation can also lead to the cancellation of your policy or make it difficult to find a new insurer.
• Texting, talking while holding your phone, checking GPS, eating, or reading a map while driving can all result in citations for distracted driving. Almost all insurance providers in Canada list this as a major offence

Check out our blog for more details on the implications: Traffic Tickets and What They Mean for Your Car Insurance.

How Do Accident and Claim Incidents Affect Your Driving Record?

Accidents can also considerably impact your car insurance premium, mainly if you were found to be at fault. The number of accidents you’ve been involved in, their severity, and the resulting insurance claims affect how much you pay.

At-Fault Accidents

• Your premium will likely increase if you’re responsible for causing an accident. Insurers consider at-fault accidents as risk indicators, meaning you may be more likely to cause future incidents. Occasionally, an accident can stay on your record for up to six years, affecting your insurance rates.

No-Fault Accidents

• While no-fault accidents don’t usually impact your insurance rates as much as at-fault ones, they can still have an effect. Some insurers may consider the number of claims you’ve filed, regardless of fault, as an indicator of driving habits. If you have a history of frequent claims, even if you’re not at fault, you may see a slight increase in your premium. Read more on our blog:  What you Need to Know About No-fault Car Insurance.

Accumulation of Multiple Incidents

When it comes to your driving record, multiple violations or accidents can compound the effect on your insurance premium. A single ticket or accident might not have a drastic impact, but a history of numerous infractions indicates a pattern of risky behaviour toward insurers. This could lead to higher premiums or placing in a high-risk category, where coverage options are more limited and costly.

For instance, if you have a speeding ticket, an at-fault accident, and a DUI on your record, the combined effect will substantially increase your insurance rates. Insurers view drivers with multiple incidents as significantly higher risk than those with isolated events, meaning they’ll charge more to cover the anticipated risk.

How Long Do Incidents Stay on Your Driving Record?

The duration that tickets, violations, and accidents stay on your record can vary based on the type of incident and the insurer’s policies. In Canada, minor tickets generally remain on your driving record for three years, while significant violations like DUIs can stay for up to ten years. Accidents can impact your insurance rates for anywhere from three to six years. Understanding how long incidents affect your premium is crucial for managing your rates and planning for future coverage.

What You Can Do to Improve Your Driving Record?

If your driving record has impacted your car insurance premium, there are several steps you can take to reduce your rates over time potentially:

Maintain a Clean Record Moving Forward

• The best way to lower your rates is to avoid any new incidents. Over time, as older tickets, violations, or accidents are removed from your driving record, your premium should gradually decrease.

For New Drivers – Take a Defensive Driving Course

• Many insurers offer discounts for drivers who complete an approved defensive driving course. These courses can help you improve your driving skills and show insurers that you’re committed to safe driving, which can help lower your premium.

Consider Usage-Based Insurance (UBI)

• Some insurance companies offer usage-based insurance programs that track your driving habits using a mobile app or a device installed in your car. If you drive safely, you could earndiscounts on your premium.

Shop Around for Insurance

• Different insurers have varying ways of calculating your driving record. It’s worth shopping around for quotes to see if another company offers a better rate based on your circumstances.

Your driving record is a crucial factor in shaping your car insurance premium. Tickets, violations, and accidents can contribute to higher rates, with the impact being more severe when multiple incidents are involved. However, you have the power to manage and even reduce your premium over time. Understanding the connection between driving habits and insurance costs leads to savings and a safer driving experience.