How Your Driving Record Affects Your Insurance Premium

One of the best ways to reduce the auto insurance premiums that you pay is to maintain a good driving record. Even in states that have no-fault insurance, your premium will be affected if you make an accident claim or get a traffic ticket. Even if the accident is the other driver’s fault, you may see an increase in your insurance premium if you make several claims against your policy in a short period of time. On the flip side, however, auto insurance companies have begun to reward good drivers as well as punish bad drivers. Your good driving record can not only reduce your annual auto insurance premium, it may entitle you to special perks, discounts and even reduce your deductible.

Take a look at some of the special treatment you’ll get from your insurance company just for avoiding accidents and following the rules of the road.

Lower Premiums
The biggest benefit to keeping a clean driving record is, of course, a reduction in your auto insurance premium. If you have no accidents or traffic tickets – particularly moving violations – on your record when you apply for auto insurance, you’ll start out at a lower rate.

It gets better, though. Maintaining your safe driver record will do more than keep your auto insurance premium low, it can reduce your premium further. Most insurance companies will apply safe driver points, or give you a percentage discount against your premium for each year that you go claim-free. Those discounts can add up to a considerable amount over the course of a few years. In most cases, you can even take your safe driver discount with you if you switch insurance carriers.

Forgiving Your Accidents
If you already have accidents on your driving record, a few years with no accidents or traffic tickets can remove them from your record. Many auto insurance companies now offer “accident forgiveness” as a perk for drivers who maintain a good driving record. They may remove older accidents from your driving record, and take back premium increases that resulted from those accidents or traffic tickets.

Some auto insurance companies even offer accident forgiveness in reverse – if you’ve had several years of safe driving with no claims against your policy, your first accident won’t result in a premium increase. Be aware though, that if you have a second accident in a short period of time, you may end up with a double whammy from it.

Cutting Your Deductible
Another huge benefit that you’ll get from maintaining a safe driving record is reduced deductibles. Many insurance companies will now reduce the deductible you’re required to pay before your insurance kicks in by a percentage for each year you go without an accident. Some auto insurance providers will actually do away with your deductible altogether after several years without an accident or traffic ticket. This can be an enormous benefit if you’d originally elected to pay a large deductible in return for smaller premiums.

Special Discounts and Other Perks
As if saving money on your insurance isn’t enough a reason to maintain a safe driving record, some insurance companies now offer special safe driver rewards programs that are similar to credit card reward programs. The details vary from company to company, but you may earn discount cards for travel, hotel and leisure destinations and even cash back on your insurance for each year that you go without an accident or traffic ticket.