Impact of your driving record on your car insurance
We may not all be experts on our car insurance policies, but it's safe to say that most of us know our driving record affects our car insurance rates – for better or for worse. Generally speaking, the fewer accidents you have or the less serious your traffic violations, the lower your car insurance rates will be. Of course, driving history is just one of many factors – but it shouldn't be ignored.
Have you ever wondered how insurance companies check your driving record? Or perhaps simply how your driving record will be factored into your car insurance rates? What constitutes a "premium-changing" event? Read on to find out.
How do insurance companies know exactly what's on your driving record?
When you apply for a new car insurance policy, you'll likely review your driving history over the past few years. Minor dents, speeding tickets, and everything in between. The question is, how do insurance companies know your driving history, and what impact will that have on your premiums?
First, it's safe to assume that most insurance companies will only consider your last three years of driving history. If you can't remember everything that happened during that time, don't worry. Your new insurance company might check your record with what's called a "driving history report." You can order one yourself if you're curious.
Your driving record (also called a motor vehicle record) is a history of your driving, which includes demerit points, driver's license suspensions, traffic tickets, and driver education courses you have taken. These records will not show your accidents.
Often, insurance companies (and even employers, if you'll be driving a company or commercial vehicle) will request another form that details your driving history, the most common being a three-year driving record. This includes information about your driver identity, total demerit points, driving convictions, suspensions and reinstatements, and active fine suspensions—all within the last three years. There are also forms that contain the same details over a five-year period.
Reports that can be verified include:
- Motor vehicle registration
- 5-year or 3-year file
- Extended driving record
- Collision or accident reports
- Copies of the driver's documents
- Driver's Access to Information File
- Driver's confirmation letter
Insurance companies may also check driving licence history.
Insurance companies and employers can also check your driving history for any driving courses and suspensions. This history can only be requested by law enforcement agencies, a court order, or the driver themselves. It will detail all completed courses, all residential addresses on file, renewals/replacements/class changes for driver's licenses, and, of course, the driver's identification.
How does your driving record affect your car insurance rates?
How exactly does your driving record affect your car insurance rates? There are a few ways. Note that employers who hire you to drive company vehicles may also look at these marks in your history, just as an insurance company would.
Accidents and collisions
Unless you are found not at fault, accidents on your driving record will immediately affect your insurance premiums. If fault cannot be determined, is unclear, or if you were at fault, you will see an increase in your insurance rates. Some insurance companies offer accident waivers which, if you have purchased this endorsement, will "forgive" your first accident as long as you do not file any claims prior to that accident. An accident can be recorded on your driving record and can affect your premiums for at least five years, depending on its severity.
Traffic violations
Traffic tickets—usually two or more—can increase your insurance premiums. Tickets are evidence that you were driving dangerously. However, photo radar tickets are generally exempt from rate increases because there's no solid proof that you were the one driving at the time. Parking tickets will also generally have no impact on your insurance rates.
Major traffic violations and infractions will significantly increase your insurance rates. Going 50 km/h over the speed limit—or less, depending on the zone—as well as driving under the influence or performing stunts are all considered criminal offenses and can affect your ability to obtain insurance. Many insurers will only offer minimum liability coverage if you have a serious infraction on your driving record.
Driver training course completed
This is a mark you want on your driving record. Depending on your insurer, you may be eligible for several discounts if you've already taken an approved driver training course. While approved courses will vary by provider, it's worth checking with your company to see which courses qualify for a discount. Driver training courses—beyond their potential reduction in your insurance rates—can also help you improve your driving habits, reduce your risk of collisions, and prevent problems later on. Even if you're not a new driver, it's worth taking a driver training course to refresh your driving skills and potentially qualify for a premium discount.
The bottom line? It's worth it – again and again – to practice mindful driving. Not only will it reduce the risk of your insurance rates being affected, but it will also help you stay safer on the road. Drive carefully!