Negative Driving Records Usually Mean Higher Insurance Premiums

If a person has a record of being involved in numerous car accidents, insurance companies are not going to offer that person the same insurance coverage for the same price that they would offer it to a person who has never before been in a single car accident. It only makes sense that a person who has been in numerous car accidents will probably be involved in another one, and therefore, insurance companies have no choice but to charge the accident-prone people more for coverage.

The DMV Keeps Records

When a person is involved in a car accident, and the accident was his or her fault, "points" may be added to that person's driving record. The Department of Motor Vehicles in most states keeps records so that people's records can be monitored. Other reasons that points may be added to a driving records are: speeding, running red lights, not stopping at stop signs, and numerous other driving violations. In some states, parking tickets can even be added to a person's driving record.

Insurance Companies Can Check DMV Records

In most states, insurance companies will not extend an insurance coverage offer to anyone before reviewing their DMV record. A driving record, while usually goes back for only a few years, can tell an insurance company two things… it can evaluate whether or not a person meets the minimum standards for insurability, and it can also be used to determine the level of risk a person poses to the insurance company. Insurance companies are businesses, and they must be profitable in order to survive. Therefore, they must evaluate how much money they could lose on a potential client and then determine if it is worth their while to offer insurance coverage to that person. Obviously, a person who has a long history of at-fault accidents, may not be the best risk for an insurance policy, because the likelihood of another at-fault accident is high. In some cases, DMV records will not affect whether or not an insurance company will offer insurance coverage. In fact, some insurance companies advertise that they will extend insurance coverage to anyone, no matter what their driving record. Insurance companies with this type of offer, however, tend to be more expensive.

Records Will be Reviewed Periodically

While insurance companies rarely have time to monitor any client's driving record on a daily basis, they are likely to check DMV records at least once a year. Therefore, an at-fault accident, a speeding ticket, or any other sort of driving infraction can probably not be hidden from an insurance company. When an insurance company is alerted of problems on a client's driving record, that person's rates cannot be increased in the middle of a policy's contract. However, most policies are only good for one year, so rates may increase when the policy is up for renewal. A client has the right to either accept higher rates or to cancel the policy altogether. In worst case scenarios, policies can be refused renewal if a person's driving record is extremely negative.