(MotivateDaily.com) – So you’re getting ready to purchase a brand-new car, and the lender has calculated an affordable loan payment. Then, when you call to get the vehicle fully insured, you’re shocked with a quote that’s enough to break your budget.
While having full coverage is essential to secure the loan, the premium can be unaffordable if you have a poor driving record. We’ll explain why this happens and how your driving record can ultimately affect your car insurance policy below.
How Are Insurance Rates Calculated?
Much like a credit report, insurance agencies pull your driving record via your license and other applicable public documents. It will bring up the current status of your driver’s license and the history associated with it. It displays how long you’ve been a licensed driver, if your license has ever been revoked and whether you’re under any current restrictions.
Part of the application for new or existing insurance policies homes in on:
- Where you live
- Other drivers in the home
- If you’ve had continuous auto insurance for the past 12 months
Most insurance companies will also pull your credit report history. All these factors go into determining your policy premium amount.
What Types of Violations Go on Your Record?
Have you ever gotten pulled over for more than just a minor traffic ticket? If so, these charges will show up on your driving record report through the Department of Motor Vehicles in your state.
Common violations include:
- Aggressive driving
- No proof of insurance
- Reckless driving
- Failure to yield or stop
- All accidents
Most convictions will stay on your record for several years (depending on your state’s regulations). If your Secretary of State has had to revoke, suspend or limit your driving privileges, this will definitely affect your permanent driving record information.
How Points Affect Your Insurance
When you get a traffic ticket for speeding or any moving violation, points will be added to your driving record. A few points may have a small effect on your driving score when insurance companies rate you. Multiple and cumulative points can negatively affect your record and put you in a high-risk driver category.
In certain states, you may be able to have these points removed or reduced by taking a special class or course.
Have You Turned in Previous Claims?
Any traffic accidents you’ve been in will show up on your driving record and insurance report for roughly 3 to 5 years. Insurance underwriters take a close look at previous accident claims, and it can be challenging to get a good insurance rate if you were at fault.
The good news is if you have a poor driving history, you can improve your future record and rating by staying out of the court system. Avoiding traffic tickets, obeying the law and improving your credit history will all help you attain a low insurance payment in the future.
~Here’s to Your Success
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