Unhaggle | How Speeding Tickets Affect Your Insurance

Posted by | April 24, 2014 | Ownership | No Comments

speedingticket

Ever wondered how cruising down the highway at 160 km/hr in your Chevrolet Corvette affects your car insurance? While going over the speed limit might seem like a fun thing to do at the time, speeding tickets are a serious red mark against your driving history, directly affecting your insurance premiums. Though it may seem unnerving, keep in mind that you aren’t the first person to get caught exceeding the speed limit. So, get a clear picture of what a speeding ticket means in terms of money and consequences, we’ll paint one for you.

Why Does It Matter?

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When it comes to your insurance premium, insurance companies always assess and reassess the likelihood that you will be involved in a collision or accident. Depending on how likely this scenario is, the insurance premiums you are paying will be higher or lower. Common factors that are looked into are car make, colour, your driving experience and your driving history, with the latter being the most important. As they rightly say, the past predicts the future, with your driving history being used to determine how good of a driver you are. This gives the insurance company an approximate probability that you will require a payout from the insurance company.

Traffic violations such as speeding tickets signal to the insurance company that you are a higher risk customer that will require a higher premium to insure without incurring losses. Depending on the violation, getting just a single ticket can boost an average policyholder’s auto insurance premiums by as much as 22 percent, according to an analysis of over 490,000 policy quotes conducted by Insurance.com.

What Will Happen?

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Every company has a different policy when it comes to traffic tickets. Often a speeding ticket won’t have an immediate effect on your insurance rates. This happens because most insurance companies do not look at your driving record every month, but do so when your contract is initially purchased or renewed.

When looking into renewing your contract, some companies will raise your rates for three years, while many will simply apply a surcharge for the first year. One of those will be removed if you have no more speeding tickets or other traffic infractions on your driving record. While getting just a single ticket might not drastically shoot up your insurance costs, getting several tickets can create significant problems. Each additional ticket after the first one will cause a much larger increase in the insurance rate you pay for your Toyota Camry, for example.

If you are ticketed for speeding, a big factor that determines the outcome is the extent to which  you were exceeding the speed limit. For instance, drivers who are speeding 20 km/h above the posted limit will see their car insurance premium increase much more than the drivers who are ticketed for going only five km/h above the speed limit.

Keep in mind that when you get a traffic ticket, it’s also good to have a positive relationship with your insurance company. Many car insurance companies won’t raise your rates after just one ticket if you’ve been a loyal customer with a previously clean driving record.

What Should I Do?

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If you have been involved in a traffic violation and it’s nearing renewal time for your car insurance contract, you are highly advised to shop around among multiple insurance providers to see if any of them are willing to offer you a lower premium than your current insurance company. Some companies are more or less tolerant of drivers with driving violations, especially if they are not recurring violations. This would also be a good time to look for any potential discounts available, as every little bit helps negate a premium boost after a traffic violation. Many insurers offer discounts for bundling together home and car insurance policies, or provide you with a lower premium if you attend driver education classes or have security systems installed in your car.

Finally, as a last resort, if your insurance costs are getting out of hand, you can consider lowering the deductible for your coverage plan. According to Insurance.com, boosting these deductibles from $250 to $500 can shave around 30 percent off of your car’s coverage. You will end up paying more out of your pocket in case of an accident, but on the other hand, your premiums will be lower. If you have an older car, consider dropping comprehensive and collision protection on your insurance plan altogether to save even more money.

Keeping these in mind, we can see that speeding tickets are not the end of the world, but still not something one would want on their record. If you do end up with a ticket, now you are better equipped to handle the situation. The best advice remains, however, to just slow down and avoid tickets in the first place.

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About Andrew Tai

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