My Finances Today — If you get a traffic ticket, conventional wisdom say’s you’ll wind up seeing a hike in your insurance rates — you know, for not being a “safe” driver and all.
But the conventional wisdom might be wrong. It turns out insurance companies don’t pursue “unsafe” drivers as aggressively as you may think.
InsuranceQuotes.com says in an April study that only 19% of Americans who got a traffic ticket in the past five years are paying more for car insurance as a result. That’s fewer than in the 2013 study, when 31% of Americans who got a traffic ticket in the previous five years saw an increase in premiums.
It’s also not younger drivers racking up the majority of parking tickets. Rather, it’s drivers between 30 and 49. Only a quarter of 18- to 29-year-olds got a ticket for a moving violation in the past five years, compared with 31% of 30- to 49-year olds — a slide upward in age that signals why so many ticketed older drivers dodge an insurance rate spike.
Checking a driver record can be costly, says Laura Adams, an InsuranceQuotes senior analyst, so most carriers check a young driver’s record every six months and won’t check an older driver’s. “Insurers typically don’t know as much about you as you might think,” Adams says. “Oftentimes, unless you’re a young driver, they are unaware of minor tickets and violations you receive on the road.”
“Younger people have a bad reputation of being risky drivers and typically face additional scrutiny from insurance carriers,” Adams says.
Insurance companies may be starting to catch on, and it’s only good financial practice to take steps to keep your auto insurance costs down. There are some easy, effective ways.
For example, InsuranceQuotes recommends taking a driving safety class. That can take points off your driving record, as insurers view the experience as improving your driving habits.
In addition, consumers looking to curb insurance costs need to get creative when shopping for auto insurance. “Insurers charge differently for violations and accidents,” says Jason Foucher, director of pricing, regulatory and insurance product management at Metromile, a San Francisco auto insurance provider. “So if you know you have violations on your record that will increase cost, look for other ways to save with your insurance, like policies that reward low mileage drivers.”
If you do see your auto insurance bill bumped up due to a traffic violation or two, don’t be reluctant to change companies. “Actually, the best way to minimize the damage of increased rates from traffic violations is to shop around,” says Adam Johnson of QuoteWizard, a Seattle insurance services provider. “Your current insurer can raise your rates due to heightened risk, while another company will incur your risk at a lower rate just to acquire your business.”
“A new insurance company will be more forgiving than your current company,” he adds. “Switching companies is the simplest solution. You can try to battle with your current insurer or battle the legal process, but those are typically battles you don’t win.”
There’s always a chance of avoiding higher insurance rates by beating a traffic ticket, especially if you’re an older driver. But it’s a risk. “Traffic tickets can spike insurance rates tremendously. Depending on the offense, perhaps even up to 25% or so,” says Dmitriy Shakhnevich, a New York City criminal defense lawyer. “It’s especially awful because when you combine that with the low standard required for an officer to prove the violation, a traffic ticket is almost impossible to escape cleanly.”
The best way to do that is to avoid getting a traffic citation in the first place — and saving 25% on auto insurance is a good incentive to slow down, be vigilant and keep your driving record spotless.
— Written By Brian O’Connell For MainStreet
