|Question: What are points, and do they affect my insurance rates?|
Your state's Department of Motor Vehicles probably uses some kind of point system to rate its drivers. Each state has its own point system, but typically, numerical values are assigned to different types of driving violations. The more serious the violation, the higher the point value. For example, you might get only one point for a speeding ticket, but three or more points if you're convicted of drunk driving. The bottom line is that, as you accumulate points, your driving record gets worse in the eyes of both your state and the insurance industry. And that can mean higher auto insurance rates for you.
The purpose of these higher rates is not to punish you for an accident or other violation. Believe it or not, insurers want to charge premiums that are fair and appropriate. Since statistics show that people who've committed driving infractions are likely to do so again, it's only reasonable that your premium should go up after an infraction. How much it goes up usually depends on the insurer. An insurance company may use its own point system to calculate rate increases. Your insurer's point system probably resembles your state's point system--both assign you points based on the number and types of violations you commit. Your insurer then uses these points to apply surcharges to your policy, which drives up your rate.
Your insurer gets information on your driving record by checking with your state's Department of Motor Vehicles. There are certain times when you can bet that your insurer will run a check. For example, expect your driving record to be reviewed anytime you want to increase your coverage or make other changes to your policy. Of course, your record will also be checked when you first apply for coverage and when it comes time to renew your policy. Depending on how bad your record is, an insurer could even deny you coverage.