Scoring points is a good thing, unless it’;s on your driving record. Still, if you know how your state’;s point system works, you’;ll have a better game plan for keeping your license — and your auto insurance rates low. Here are 10 things every driver should know:
1.Auto insurance companies don’;t rely on state motor vehicle department point systems — they use their own.
Both state motor vehicle departments and insurance companies use point systems to track driving performance, but they are separate assessments. DMV points are applied when you are convicted of certain traffic violations. If you accumulate too many points within a certain period of time, your license is typically suspended or revoked.
Insurers don’;t generally pay much attention to DMV points because they use their own point system when deciding how much to raise your rate. Based on the infraction, your rates rise by a predetermined amount at certain thresholds.
“For example, one Minnesota insurer assigns 4 points to a chargeable accident with a claim of $ 750 or more and 3 points to a speeding conviction for 10 mph over the limit. Its surcharge schedule shows the rate for a driver with 7 points would be multiplied by 1.27 — that is, a 27 percent increase,” says Penny Gusner, consumer analyst for CarInsurance.com.
2. Not all states use point systems. There are 9 states that don’;t use points to keep track of bad drivers, but that doesn’;t mean you’;re off the hook if you rack up violations. These states simply monitor your driving record to determine if your license should be suspended or taken away. For instance, in Oregon, if you have 4 accidents or 4 convictions — or a combination that totals 4 — in a 24-month period, you lose your license for 30 days. And because auto insurers review your driving record, violations can affect your rates.