What is point system and how does it affect your car insurance rate? - The points system is being administered by the Department of Licensing in the respective states. Exceeding your point allowance within a time period will result in the suspension of your license. However, it might vary with various insurers and their usage of their own system. Generally they use a system where points are assigned for each infraction in the driving record of the applicant that they use to determine the probability of a claim.
The following are the points assigned to each infraction.
- Over speeding 3 Points for first occurrence and 2 points for second and 2 points thereafter.
- No charge Violation – 0 for each occurrence
- Not at fault collision – 0 for each occurrence
The normal practice is for the insurers to assign their own point value against each infraction. This will be used for calculating the dollar amount for each point that you have to pay extra that is included in the overall price. Often, your first infraction, such as a collision, won't impact your rates too much. But if you have filed a claim on your car insurance policy you can expect that your rates to rise due to this. Any major violation can result in your rates rising up to 26 per cent above the current rate on your auto insurance as they carry higher points.
Factors contributing to the point system
The insurance companies mostly use the point systems to help them to calculate their premiums. The other factors are the cost of your insurance, your age, gender, marital status, the type of vehicle you drive, the usage of your vehicle and even your credit history will have a say in fixing your auto insurance rate. That is why it is much more beneficial to prove yourself as a safe driver. Several violations can double your current insurance rates, which could mean that you can no longer afford them for the car that you are driving on the road.
Do’s and Don’ts
It is always better that you get a copy of your driver's abstract from the local Department of Motor Vehicles branch in your area for a small fee. This is much needed to track your own infractions on the road and you should disclose the same with insures, when you apply for any insurance. Otherwise, the insurance company will eventually come to see your driver's abstract when you apply for renewal of your auto insurance with them. It iss best to disclose it with your insurance company if you have any such blemish on your driving record. If they find out eventually the insurance company will cancel or void your insurance policy.
If you have any such issues recorded in your driving record, the next best course of action for you is to contact your current insurance company and ask them about their current policies and the rates. You should also check if they have an amnesty program way to reduce the effect of this incident on your car insurance rate.