How your driving record impacts your auto insurance

We may not all be the most well-read on our auto insurance policies, but it’s safe to say that most of us know that our driving record impacts our auto insurance rates – for better or for worse. As a rule of thumb, the less accidents you have/the less severe your traffic violations are, the lower your auto insurance rates will be. Of course, driving history is just one of many factors – but it’s not to be ignored.

Have you ever wondered how insurance companies check your driving record? Or maybe just how your driving record will factor into your auto insurance rates? What constitutes as a “premium-altering” event? Read on for details.

How exactly do insurance companies know what’s on your driving record?

When you apply for a new car insurance policy, you’re probably going to be reviewing the last few years of your driving history. Minor bumps, speeding tickets, and anything in-between. Question is, how do insurance companies know your driving history, and what will impact your premiums?

First, it’s safe to assume that most insurance companies will really only consider your last three or so years of driving. If you cannot remember everything that has happened in that period, don’t worry. Your new insurance company may be checking your record with something that is referred to as a “driver’s abstract.” You can order one of these yourself if you’re curious.

A driver’s abstract (also referred to as a motor vehicle record) is a recorded history of your driving past, which will include any demerit points, driver’s license suspensions, traffic tickets, and driver’s education courses you have taken. These records will not show your accidents.

Often, insurance companies (and even employers, if you’re going to be driving a commercial or company vehicle) will request another form that can detail your driving history – the most common of which being a three-year driver’s record. This will include your driver identification details, total demerit points, driving convictions, suspensions and reinstatements, and active fine suspensions – over the last three years. There are also forms that include the same details over a five-year period.

Reports that can be checked include:

  • Motor vehicle record
  • 5-year or 3-year driver’s record
  • Extended driver’s record
  • Collision or accident reports
  • Driver document copies
  • Freedom of information driver’s record
  • Driver confirmation letter

Insurance companies may also check driving records for license histories.

Insurance companies and employers can also check your license histories for any driving courses and suspensions. These may only be requested by law-enforcement agencies, court order, and by the driver themselves. This history will detail any course completions, all residential addresses on the record, renewals/replacements/class changes for driver’s licenses, and, of course, driver identification.

How does your driving record affect your car insurance rates?

How exactly does your driving record affect your car insurance rates? There’s a few ways. Note that employers who are hiring you to drive company vehicles may also be looking at these marks in your history, just as much as an insurance company would.

Accidents and collisions

Unless you are deemed not-at-fault, accidents on your driver’s record will cause your insurance premiums to be impacted immediately. If the fault is not able to be determined/is unclear or if you were at-fault, you’ll see a rise in your insurance rates. Some insurance companies offer accident forgiveness waivers which, if you have purchased this endorsement, will “forgive” your first accident so long as you have been claims-free up until the accident. One accident may be on your driving record and can impact your premiums for up to five years or longer, depending on the severity.

Traffic tickets

Traffic tickets – typically two or more – may start to cause your insurance rates to go up. Tickets are proof that you were driving dangerously. Photo radar tickets are generally exempt from rate increases, however, as there isn’t any solid proof that you were the one driving at the time. Parking tickets will typically not impact your insurance rates either.

Major tickets and infractions will cause your insurance rates to rise sharply. 50kmph over the speed limit – or less, depending on the zone you are in – as well as drunk driving or stunt racing are all considered criminal offenses and may impact your ability to get insured at all. Many insurers will only offer the minimum liability coverage if you have a major infraction on your driver’s record.

Completed driver’s education courses

This is one mark you do want to have on your driving record. Depending on your insurance provider, you may be eligible for several premium discounts if you have completed an approved driver’s education course in the past. Although the approved courses will vary by provider, it’s worth checking with your company to see which courses will result in a discount. Driver’s education courses – beyond their potential discount on your insurance rates – can also help to hone your driving habits, reduce your risk of being involved in a collision, and prevent issues later down the line. Even if you aren’t a new driver, it’s worth taking a driver’s course to refresh your driving habits and potentially become eligible for a premium discount.

The bottom line? It’s worth it – over and over – to practice mindful driving. Not only will this reduce the chances of your insurance rates being impacted, but it will help to keep you and others safer on the road. Drive safely!