How Do Speeding Tickets Affect Insurance Rates?

    Receiving traffic tickets actually involve two separate but equally important cost components. The first is the cost of the ticket itself. The second is the impact that the violation has on your insurance rates.

    The rates that insurance companies set for auto, life, homeowners’, and business insurance policies all come down to the risk that the insurance company determines they are taking on by covering someone for one of these policy types.

    Risk and Insurance Rates

    Determining that risk generally involves making predictions on the likelihood of having to make a payout in the future based on an assessment of your behavior or patterns of behavior in the past. If a company determines that you will very likely need to be covered for an unfortunate circumstance, your premium will be that much higher. 

    When we speak of car insurance, the risk that your insurer takes in providing you with car insurance and accident coverage will largely be determined by your driving record. Speeding endangers everyone on the road, according to the National Highway Traffic Safety Administration (NHTSA). Speeding citations are also the most common of all traffic violations, and speeding is highly correlated with being at-fault for resultant accidents. In other words, drivers who receive speeding tickets are also likelier to be (or historically have been found to be) at fault for accidents resulting from their speeding.

    In short, you will likely have to pay higher premiums to your insurer if you have many driving violations on your record.

    Insurance Rate Hikes After an Accident

    The complication, however, is that speeding affects your insurance premiums based on a number of factors, including where you live, your age, how much above the legal speed limit you were caught driving, your history of prior violations, and whether or not you were driving under the influence of narcotics or alcohol.

    Depending on your insurer, there are a number of different situations you may face if you receive a speeding citation.

    • Some insurance companies do not increase the premiums of their customers for first offenses; others only increase their rates for guilty drivers who were found to be driving 15 miles per hour or more over the legal speed limit.
    • State law also comes into play when it comes to insurance premiums. Many states have a points system in which each citation or violation adds a number of points to your record. Hitting a predetermined number of points can then result in fines or loss of your driving privileges.
    • Violations of the same type may have different implications, with some insurance companies levying higher premium increases for violations in one state and a different set of increases for violations of the same type in different a different state.
    • Multiple violations matter even more. It can happen that you were caught speeding but have a genuine reason for going above the speed limit, such as in case of an emergency or if you were caught off guard by a sudden drop in the posted speed limit, in which case you may be able to contest a citation with the state or appeal an insurance rate hike with your insurer.

    Appealing Citations or Insurance Hikes

    • You may have had a genuine reason for breaking traffic laws. You can avoid a jump in your premiums if you contest the citation and win, in which case, the citation will be stricken from your record.
    • Some states drop speeding violations from driver records if they take a defensive driving course. Some of these courses can be taken online. They are generally not free, but the benefit of having your citation removed from your record and your premiums falling back to what they were before receiving the citation might be worth the cost of the class.
    • Make sure to avoid a second ticket. Some tickets are automatically removed from driver records after a certain amount of time (39 months in some states), in which case your citation points would be stricken from the National Driver Register, a comprehensive database on driving citations and other driver-related records.

    If none of the above work and if you feel you are paying too much for car insurance, or if your premium has jumped too much after receiving a speeding ticket, think about switching insurers. You may receive a discount from a new provider, and as long as you are careful to avoid tickets in the future, you can save by going with a new company.