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Will Your Car Insurance Increase After A Speeding Ticket

Posted by Hank Coleman on Feb 24, 2011

So, you just got pulled over by a police officer and given a ticket for speeding. Now comes the $1,000 question. How much, if any, will your car insurance premium rise now that you received a speeding ticket? There are many factors that go into this equation that your car insurance company calculates based on moving and other violations that you have. And, of course, the car insurance companies do not share this proprietary information with the general public. It is akin to a trade secret. But, there are a few deductions that we can make to determine if your car insurance premiums will rise because of a speeding ticket.

Car Insurance Companies Use Merit Rating Systems

Merit Rating Plans are also called surcharge points by the car insurance companies. Car insurers do not use the different states’ Department of Motor Vehicles point system. They may consult with their DMV’s point system, but car insurance companies tend to use their own proprietary point systems to evaluate a customer and his or her actions behind the wheel. Insurance companies use merit rating systems to calculate how much risk they face insuring a driver based on their patterns such as receiving speeding tickets, and the car insurance companies use this when calculating an insurance premium.

DMV Points Are Run By Your State

Each state in America runs its own point system for moving violations in a car. Almost no two states point systems at the respective DMVs are the same. States use this information to determine if drivers should keep their license. Every state has a threshold of points that a driver is allowed to lose in a given time period. If he or she goes over that points because of too many speeding tickets, for example, then the driver can lose his or her driver’s license and face other penalties.

How Do Points Affect Your Insurance?

The problem with this question is that no one really knows. It is like asking about what exactly comprises a person’s credit score. No one really knows. Like the credit bureaus, the car insurance companies play their cards close to the vest. It is safe to say that multiple moving violations will cause your car insurance premiums to go up. You may find that your insurance company will forgive the first speeding ticket, but you may not be so lucky when you are issued a second one. Multiple speeding tickets begin to show a pattern, and that pattern may seem to your car insurance company that you are a high risk driver. If that is deemed the case, then you can expect your insurance premiums to rise. Insurance companies are in the business of assigning either you or events in your life to a category of risk. How much risk do you represent to the car insurance company? If your risk profile goes up, then you can also count on your insurance premiums to go up.

According to the Insurance Information Institute which is an insurance industry information clearinghouse group, the average American driver pays approximately $850 per year in car insurance premiums. Many attributes comprise the price you pay in premiums for car insurance. Each state and each insurance company is different, but it is safe to say that where you live, the type of car you own, how far you drive your car every day, your sex, your age, and your driving score factor into the calculation of your insurance premium. Having a clean record and avoiding speeding tickets are two surefire ways to help keep your car insurance rates as low as possible.