How Long Do Accidents Affect Insurance Rates?

Reader Question: How Long Do Accidents and Tickets Affect What I Pay for Insurance? Sometimes I Hear Three Years, Other Times I Hear Seven Years. Which Is It?

There’s a lot of misinformation about how long certain tickets or violations affect your insurance premiums and honestly, there’s no exact answer to that. That’s because this actually varies greatly from insurer to insurer and state to state, so always ask your insurer how long they’ll factor in tickets or violations. However, here are some general guidelines about how long these can affect your premiums regardless of insurer or where you live.

Minor Tickets

Minor tickets include moving and non-moving violations like expired insurance stickers or driving 10 miles over the speed limit. In most cases, these tickets will have very little effect on your premiums. In fact, several insurance companies will completely forgive your first traffic violation ticket (such as Nationwide’s ‘Accident Forgiveness or Minor Violation Forgiveness’) or a violation ticket that you receive in “x” amount of years (i.e., if it’s been five years since your last minor ticket, some insurers will forgive it).

Insurers use a graduated, actuarial system that also bases any premium surcharges on severity, age, and any subsequent tickets. Once you receive one violation or have a second accident, you’ll really start to see premiums increase. Each insurer has a different schedule that dictates the amount of increase, but it may be something like this — if you receive a second ticket, you’ll see a slight increase to your premium usually anywhere from a 3% to 10%. A third ticket may result in another 10-15% increase. A fourth ticket may result in a 25% increase, and so on. Obviously repeat offenders who regularly display bad driving habits see the worst penalties, but factors like age and state play a large part in how much your premium will go up. Thus, a speeding ticket for going 10 miles over the speed limit will affect a 17-year-old much more than it will an established driver with a clean record who’s 60.

Note that traffic violation tickets will typically stay on your record for three years from the date that you’re convicted, and not from the date that you received the ticket.

Major Tickets

Major tickets are those that include high-speed driving tickets, such as 50 miles or more over the limit, or driving without insurance. One major ticket can cause a significant increase in your insurance premium, usually for the next two to five years. Major offenses can easily increase your insurance by 10-50% for the first ticket, and subsequent tickets will result in more significant increases.

If you receive too many “major” tickets, your insurer may not hesitate to cancel your policy, or may even choose not to renew it when your policy’s term is up. Though many policyholders think they’re the ones who are getting to decide whether to renew their policies or not, their insurers are doing the same thing when it’s time for policy renewal too. If you have too many violations or accidents, your insurer can decide to “break it off” with you.

Granted, there are laws that protect you in such situations. Depending on where you live, you’ll generally be given a 30- to 60-day notice of non-renewal. You may have to find another insurer and will likely pay a much higher insurance rate, also shedding discounts you may specifically get from that insurer, like a long-term customer discount or special “affinity” discount, such as a discount for belonging to a certain credit union.

Accidents

Generally, if you have an at-fault accident within a six-year period, your rates will not be affected. Remember this too: even one-car accidents are considered at-fault by insurers. If you drive your car into a tree, and your collision coverage pays out, that’s rated on your policy as an at-fault accident, even though no one else was involved. If you get into another at-fault accident within that period of time, however, you will likely see a substantial rise in your insurance rate.

Another common misconception is that if you aren’t the one operating your vehicle at the time of the accident, that your insurance won’t be impacted. Your insurance rates may still increase despite you not being the driver, as it’s your policy that’s likely going to be the one that pays out for repairs, to replace totaled vehicles, and very likely going to be the liability coverage from your policy that pays for any damage or injury done to another person or their property. That’s just one more reason to make sure you choose safe, responsible drivers to operate your vehicle at all times. Anything YOU do as a driver is usually going to be a factor in your insurance premiums, and typically, anything done in your vehicle is going to also, so be responsible as far as both are concerned, even if separated.

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