Here’s How Speeding Tickets Can Make Your Finance Go Out Of Control
‘Need for speed’ can slow you down and even burn a hole in your pocket especially when it comes to your auto insurance premiums.
In one of the episodes of the popular TV show ‘Last Week Tonight’, John Oliver gave an account about how municipal fines can ruin someone’s life. Harriet Cleveland, a grandmother, had accumulated several tickets as she was unable to pay them immediately. Unfortunately, Cleveland was arrested and detained for 10 days, thanks to the unpaid fines and fees. With popular TV shows providing a detailed account of the consequences of not paying fines and fees, it is time to consider the impact of getting a speeding ticket.
Speed limits play an important role in reducing road fatalities. Ignoring the standard speed limit not only makes you vulnerable to road accidents but can also cost you money. You might end up with a speeding ticket, which can have an effect on your auto insurance premium rates.
Traffic Tickets and Premium Rates
You can be slapped with a sizeable penalty or even a jail term when you are found guilty of a serious offense like reckless driving or speeding. This, in turn, may increase your auto insurance premium rates. One of the important factors that determine the rate of your car insurance premium is the history of your traffic tickets.
Every insurance company has different set of policies when it comes to traffic tickets. While one company may raise the rate after a period of three years, another may levy a surcharge which will be removed after a year in case you have a good driving record and haven’t received a ticket in the past.
Violating the speed limit is a moving violation and insurers will not take it lightly. After you receive a speeding ticket, even if it’s your first, the insurance companies may raise the rate for a period of three years. You could see an increase of 10-25 percent in your premium rates depending on the severity of the violation.
Rate of Increase
If your driving record shows a number of moving violations and speeding tickets, you will be viewed as a high-risk client who is more likely to meet with an accident and cost money to the insurance company. Every insurance company has its own methods of calculating the risks and determining the rates of the policy.
The number of speeding tickets you have in your record, fault accidents and insurance claims play a major role in deciding the rate of increase. The only difference is how much importance the insurance company gives on each of these factors.
Choosing a new insurance company after you have received a speeding ticket is not a feasible option. The insurance carrier is likely to quote a higher rate as you will be considered a higher risk as a result of the recent ticket you have received.
Getting Dropped by the Insurance Company
If you are guilty of several traffic violations, there are chances that the insurance company may drop you as a client. It is against the law for any insurance company to cancel your policy unless you have committed a fraud or don’t have a driver’s license or haven’t paid your bill on time. However, they can refuse to renew your policy when it expires.
Speeding not only leads to serious accidents but it may also dent your budget. Follow the rules to avoid paying higher rates of premium to your insurance provider.