Car Insurance and Penalty Points

Many states have adopted a points-based system for tracking your driving behavior. Each system is unique, but in most cases, your points are reported to your auto insurance company to document your driving history.

In some cases, drivers who have many points on their state record have had their auto insurance coverage canceled by the provider.

Remember that is illegal to drive in most states without at least a minimum amount of liability car insurance.

If your auto insurance policy is canceled because of your driving record, you may struggle to find a new insurer who will extend coverage to you.

As you can see, it is important to learn more about what the points system is and how it can affect your ability to obtain the insurance coverage you need to drive legally in your state.

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What Is the Points System?

A points system is a method used by some states to track your cumulative driving history over the last few years.

Not all states have a points system, and some will report your driving history to your insurance company based on the accidents and violations you are charged with.

In most cases, the insurance company can obtain information about your driving history from the state regardless of whether a points system is used or not.

– How You Can Accumulate Points

The most common way for a driver to accumulate points is by receiving traffic citations or by being involved in an accident.

For example, in one state, you may receive between two to five points for speeding depending on how fast over the posted speed limit you were driving.

In the event you get more than a certain number of points on your record within a specified number of years, you may lose your license.

Read more: How long do points stay on your driver’s license?

Because this information is sent to your insurance company in most cases, there is also a chance that your auto insurance policy could be canceled if you have too many points.

When this happens, you should immediately start shopping for a new insurance policy with another provider. Remember that you cannot legally drive without coverage, so you should avoid driving until you can obtain new coverage.

– How Long Points Stay on Your Driving Record

Points systems vary by state, but most states have a cumulative record of points for the last two or three years.

If you are very close to exceeding the maximum number of points you can accumulate for the specified time period, you should take every step possible to avoid accidents and to follow the rules of the road.

The last thing you want is to receive more points on your record and to lose your license, your insurance, or both as a result.

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Understanding How Insurance Companies Determine Your Rate

Insurance companies often use a points-based system when reviewing your driving history as well.

While they receive your points or driving history from the state on a regular basis, most insurance companies use their own internal rating system when analyzing your driving behaviors.

Because each system is different, you may find that you cannot qualify for a policy with some providers, but you may be eligible for coverage with other providers.

Remember that insurance companies also take into other factors when determining your eligibility and rates as well. For example, these factors may include:

• Your age
• Your gender
• Details about the car, such as the make, model, year, and mileage
• Safety equipment in the car
• How far you regularly drive
• Where you live

– How an Accident Affects Your Rates

In many cases, an accident can cause your premium to rise. Even if you have only had one accident recently, your rates can increase.

A rise in your premium is even more likely if you have had other accidents or moving violations within the last few years. However, some insurance companies will overlook your first accident if you have an otherwise spotless driving history.

In many cases, auto insurance companies will look deeper at the details of an accident to determine if and by how much your premium will increase.

For example, the at-fault person may be dinged more heavily with a premium increase. The cost of repairs can also affect the amount of your premium increase in many cases.

Exploring Your Options When You Cannot Find Insurance

If you have been told that your coverage is being canceled because of your points or driving history, you may be wondering what you can do to obtain the coverage that you are legally required to have.

You can shop for new coverage online or by contacting the providers by phone. Remember that different providers use various factors to qualify you for coverage.

An auto insurance broker or agent may also help you to find the coverage you need. (For more information, read our “What does a car insurance broker do?“).

Regardless of how you shop for new rates, you will be required to provide a significant amount of information to each provider to obtain a quote including details about:

• Your car
• Your age
• Your gender
• Where you live, etc.

There may be instances when individuals cannot find coverage with any established, reputable provider, such as:

• If you have a bad driving history
• If you are trying to insure an expensive car
• If you live in an area with high theft and vandalism rates

If you cannot find coverage on your own, there are a few options available to consider.

Two possible options would be to look for an insurer that specializes in high-risk drivers or you can obtain coverage through your state’s assigned risk pool.

While you may need to obtain auto insurance coverage to comply with your state’s financial responsibilities law for drivers, it can be a challenge to find the insurance you need if you have many points on your record.

It is wise to follow safe driving behaviors at all times so that your points are kept as low as possible.

Remember that you do have some options for obtaining coverage through the state or specialized providers if you cannot find coverage through the primary providers.

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