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Your Driving Record and How It Effects Your Auto Insurance Premium

How Does Your Driving Record Affect Your Auto Insurance Premiums?

Auto Insurance, Huff Insurance, Pasadena MDDid you know that your auto insurance company has the right to review your driving record at any time?  Typically, they’ll review your driving record when you apply for coverage and when they issue a renewal offer for your car insurance policy.  This is to evaluate your risk potential, or determine if you are insurable at all.

Generally, what the auto insurance company will analyze are the incidents that are reported on your driving record.  When found guilty of a traffic violation (moving violations, parking tickets, at-fault accidents, etc.), the violation then appears on your driving record.  The more violations you accumulate, the worse your record. The violations on your driving record may or may not affect your auto insurance rate since each car insurance company has their own way of evaluating violations.

Car Insurance Companies  typically evaluate your violations using their own system to determine the amount of your rate increase (if your rates increase at all).  Most auto insurance companies, however, use a Safe Driver Insurance Plan, which lists the different types of violations and assigns a points value to each one, based on the severity of the incident.  Under this plan, as you accumulate points, your car insurance rates are subject to increase or to a non-renewal of your policy.

Your driving record isn’t the only information your auto insurance companies can use to underwrite your car insurance policy.  In most states, including Maryland, Auto Insurers can also use credit scores to determine rates. If you have a good credit score, your rates are likely to be lower than someone with a bad credit score. Auto insurance underwriters perceive a direct relationship between your credit score and the chances of you filing a claim.

Your auto insurance company can also us a CLUE (Comprehensive Loss Underwriting Exchange) report to underwrite your auto insurance policy.  Almost all car insurance companies report all of their claims activities to CLUE.  So when you apply to a new auto insurance company, they pull this CLUE report to verify the number of past accidents that you have been involved in.


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