No one is perfect, and most people get a traffic ticket at least one in their lifetimes. But the truth is, your driving record can significantly affect your life insurance. If you have a current life insurance policy and you get a speeding ticket, it will not affect your rates. On the other hand, if you are applying for a new policy or additional coverage, you can be sure that your driving record is one of the factors the insurance company will consider.
How Do Life Insurance Companies Look At Your Driving Record?
Life insurance underwriters are thinking in terms of numbers and percentages. They are tying to determine the odds that you will have an early death. This is something they want to avoid, as it means paying out death benefits before the company can collect a substantial amount in premiums. For this reason, insurers charge higher rates when they determine there is more risk involved.
In reviewing your driving records, life insurance companies will look at the following:
- DUI on your record: This factor should be obvious. The National Highway Traffic Safety Administration (NHTSA) reports that 10,874 people died in drunk driving crashes in the U.S. in 2017, the most recent year for which statistics are available. This amounts to one alcohol related traffic death every 48 minutes. A recent DUI or multiple DUIs will be more problematic for life insurance purposes.
- License revocation or suspension: This is considered high risk. The reasoning is that your license was probably taken away for a good reason. In some cases, a license is suspended simply because you forgot to pay a fine or have a health condition that has nothing to do with your driving record. If this is the case, our experienced agent can work with you to try to minimize the impact of the suspension.
- Reckless driving: This term means driving in a way that shows irreverence or indifference to the safety and property of others. In some states, certain driving behaviors are considered reckless, including racing, swerving, passing on blind curves, and high mph speeding. This type of violation adds considerable risk to your profile and increases your life insurance premiums.
- Moving violations: To life insurance companies, moving violations show a disregard for safety and increase your risk profile. These violations include speeding, texting while driving, running red lights or stop signs, tailgating, improper lane changes, and failing to wear a seat belt.
- Parking tickets: The good news is that parking tickets do not affect your life insurance rates. Insurance companies ignore them.
What Is An MVR & How Does It Affect Your Life Insurance Rates?
“MVR” is an abbreviation for motor vehicle report. It is the report on your driving record maintained by the state and submitted to insurance carriers upon request. You authorize this as part of your application for life insurance.
To qualify for the best rate class (Preferred Plus) you must have no major infractions in your MVR for the past five years. Major infractions include DUI, reckless driving, and license suspension or revocation. Too many moving violations can also increase your life insurance premiums. Most insurers will not care about one or two speeding tickets, but if you have more than two violations in the past three years, your rates will go up. If you have more than four in the past three years, your application is likely to be declined.
