If you think traffic violations lead to fines and penalty points in your driving record only, then you are wrong. It is a lot more than that. Traffic violations and a bad driving record can affect motor vehicle insurance premiums heavily.
Severe and repetitive offences can lead to impounding of the vehicle, imprisonment and also insurance companies can straight up deny you insurance. Let us understand how traffic violations affect motor insurance premiums deeply.
The link between Traffic Violations and Insurance Premium
Insurance companies look over different factors while calculating the insurance premium for the customer. These factors include: Price of the vehicle, location, term, etc. but more importantly, it includes the driving record of the customer.
Insurers check the driving record of the customer from the registered RTO. RTOs keep a record of all the traffic violations committed by the customer; be it a minor infraction or a major one. Depending on the nature and severity of the violation, premiums rates go higher.
Traffic violations reflect risky behaviour, and makes the insurer think that you are a high risk driver. On the other hand, having a clean driving record and good driving experience leads to lower insurance premium rates.
Impact of Traffic Violations on Insurance Premiums
As we established, traffic violations can cause an increase in insurance premiums. Let us go over how these violations affect insurance premiums:
1. Bad Driving Record:
In India, RTOs store all the infractions (minor or major) in their database. This driving record is checked by the insurer while calculating insurance premiums. A bad record leads to a higher rate of premium whereas a clean record lowers insurance premium rates.
2. Severity of the violation:
The severity of the traffic law broken determines how much the change in insurance premium rate occurs. A severe traffic violation like a DUI can affect the premium costs heavily whereas a minor infraction might not do as much damage. If a more serious violation is incurred, insurance companies may even deny you any insurance.
3. High-Risk Driver:
A customer with a bad driving record is considered as a High-Risk Driver. These types of customers have to bear heavy insurance premium costs due to their negligence while driving.
4. No Claim Bonus (NCB) Loss:
A NCB decreases the car and bike insurance premium costs at the time of renewal. Violations like causing an accident can nullify this bonus for the next renewal of insurance, increasing the overall insurance premium.
Types of Traffic Violations that affect Insurance Premium
Traffic violations affect insurance premium rates in different ways depending on the nature and severity of the infraction. A major violation may show significant increase in insurance premium whereas minor infractions cause slight change in premium rates.
The most common types of traffic violations that affect insurance premium are:
- Speeding Tickets: Overspeeding is the major culprit in most of the accidents. Repeated offenders are flagged as high-risk drivers and cause the insurance premiums to shoot up.
- Driving Under the Influence (DUI/DWI): Another major violation and a leading cause in accidents, DUIs can stain the driving records and may even give the insurer a cause to cancel insurance policy.
- Running Red Lights & Stop Signs: Ignoring traffic signals indicates reckless driving, which raises concerns while purchasing an insurance.
- Reckless or Dangerous Driving: Engaging in aggressive or negligent driving can lead to major penalties and cause premium increases.
- Not wearing protective gear: Not wearing seat-belts or helmets while driving or riding may seem like a minor offence, but repeated offences add up and cause a rise in premium rates.
- Accidents caused by the driver: Accidents caused due to reckless or negligence of the driver are recorded while claiming for insurance, and causes the rise in premium rates.
Tips to avoid Traffic Violations and their Impact on Insurance Premium
The best way to avoid a traffic violation in your driving record is not to create one in the first place. Following traffic rules and regulations is necessary to safeguard not only you and your vehicle, but also for those around you. Here are a few tips that can help you avoid making infractions:
1. Follow Traffic Laws:
The most obvious, obeying traffic laws and driving as per the rule and regulations will make sure you do not land a ticket. Make sure you are up to date with the new rules and regulations the government implements.
2. Take Safe Driving Courses:
Completing a safe driving course can help decrease premium rates indirectly as it helps you become a responsible driver. Car insurance rates are affected by these courses and may help you save a buck.
3. Install Safety Features in your Vehicle:
Vehicles having ample amount of safety features, and good safety ratings typically have less premium rates as they are less likely to be damaged in case of an accident.
4. Avoid Drink and Drive:
DUIs are the leading reasons of accidents and also one of the major infractions that can significantly increase premium rates or even lead to cancellation of insurance policy. Drink and drive not only causes harm to oneself, but also to those around them. Avoid drinking and driving at all costs.
5. Practice Safe Driving:
Road Rage, aggressive driving, reckless driving are all traffic violations that have a negative effect on your driving record. It is not only unsafe, but also causes a surge in insurance premiums.
Wrapping Up
Traffic rules and regulations are here to maintain law and order, along with road-safety for us citizens.There are no advantages or plus points in committing or breaking these laws. It will only bring consequences. Fines, penalties, increase in premium rates are just financial problems, ignoring traffic rules can even lead to loss of life. Drive safely and smartly.
FAQs;
1. Do all traffic violations affect my insurance premium?
Not necessarily. Minor infractions like a parking ticket may not impact your premium, but serious violations such as speeding, DUI, or reckless driving will likely increase your rates.
2. Can I lower my insurance premium after receiving a violation?
Yes. Enrolling in a safe driving course, maintaining a clean record, and opting for a no-claim bonus can help reduce your premium over time.
3. Will my insurance be cancelled if I have multiple violations?
If you accumulate several serious violations, your insurer may either increase your premium significantly or refuse to renew your policy. In extreme cases, you may need to seek high-risk insurance.
4. Can I switch insurance providers if my premium increases due to a violation?
Yes, you can compare policies and switch providers, but the new insurer will still assess your driving record, which may impact your premium.
