Does Your Driving Record Impact Life Insurance Rates?
Written By Cameron McDowell
Nov 23, 2021
6 mins read
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Driving Records And Life Insurance Rates: How Bad Driving Increases Coverage Costs
Life insurance companies look at different factors, such as your health and lifestyle, to assess your potential lifespan. If you have several medical issues or engage in high-risk activities, your projected lifespan is shorter – shorter lifespans mean higher life insurance quotes.
One key factor that may affect your potential lifespan is your driving record. So, how does your driving record impact your life insurance rates, and how do you get affordable life insurance premiums if you have driving violations? We’ll talk about these – and more – in this guide.
What Is A Motor Vehicle Report?
A Motor Vehicle Report (MVR) is your driving record, maintained by your state's DMV. This report lists any driving incidents you may have, including violations and accidents.
Depending on your state's laws and the seriousness of the violation, these incidents can stay on your record for several years. For example, speeding tickets stay on your record for just a few years. More severe incidents, like DUI convictions, can last on your record for 5 to 10 years.
Here are other traffic violations that may show up on driving records:
Moving violations (e.g. speeding tickets, running red lights)
Vehicular crimes (e.g. reckless driving)
Convictions for DUIs and DWIs
Some states have a points system for tracking violations – different offenses earn varying points. The point values for violations depend on the state.
Generally, the more serious the violation type, the higher the points assigned to them. For example, speeding tickets will earn you fewer points compared to a crime like reckless driving. If you get too many points on your record, your driver's license could be suspended or revoked.
Each state's DMV maintains your driving history differently. In New York, drivers get a lifetime record with every in-state violation. Ohio's DMV, on the other hand, has a two-year unofficial motor vehicle record. You can, however, pay a small fee to see your driving record for the past 3 years.
If you want to know your driving history, you can order a copy from your state DMV. This will give you insight into what life insurance companies see when they assess your driving record. If you have a bad driving record with plenty of accidents or traffic incidents, expect to pay higher rates.
Do Parking Tickets Affect Your Life Insurance Rates?
Parking tickets are considered non-moving violations and generally won't impact your life insurance premiums. However, if you let a parking ticket go unpaid for too long, that can get your license suspended – this will be noted in your driving record. A license suspension can raise your rates, so make sure you pay a parking ticket as soon as you get one.
Do Speeding Tickets Affect Your Life Insurance Quotes?
Speeding tickets are common moving violations. While one speeding ticket is unlikely to have a significant impact on your premiums, multiple tickets could be a red flag for life insurance companies. After all, the more you speed, the higher your risk of getting involved in a dangerous accident.
This increases the chances that the insurance company will pay out your policy claim. Insurers often charge higher premiums for applicants with a history of speeding to make up for this increased financial risk.
How Driving Records Affect Your Life Insurance Rates
Life insurance companies set your life insurance rate based on how likely it is that you will die during the term of your purchased policy. Insurance companies do this by assessing your risk factors and assigning you to a risk class. The average life insurance company will look at your driving record for the past three years to help determine your risk class.
Your risk class affects your rate class with insurance companies. Lower-risk classes enjoy preferred or preferred plus rates, while high-risk classes will be charged higher premiums or denied insurance coverage altogether.
Can You Get Life Insurance Coverage With A DUI Or DWI?
Yes, you can, but your options will be very limited. Many life insurance companies are strict about applicants with a DUI or DWI. They won’t offer you a permanent or term life insurance policy if you have a recent DUI or DWI on your record. Some may even refuse an application if you have one within the past five years.
However, underwriting guidelines have become more flexible in recent years, with some insurance companies lowering this five-year DWI waiting period to three or two years. This means that, despite past offenses, you may still be able to get coverage in exchange for a higher premium.
If you have a recent conviction for a DWI or DUI, talk to a life insurance agent. An insurance agent can help you go over your MVR, make blind inquiries on your behalf, and compare life insurance rates for someone with your lifestyle and risk profile. With their expertise, you can find out which life insurance company will give you the most reasonable rates for the coverage you need.
Always Be Honest About Your Driving Record
It may be tempting to simply not mention that you have had past driving incidents on your insurance application. However, it is strongly recommended that you be honest with your insurance company about your risk factors from the very beginning.
Life insurance companies verify your information in a variety of ways. Here are the common sources that a company can check to validate your risk profile.
Social media posts indicating activity and health issues
Public records with government institutions (e.g. the DMV)
Medical records and prescriptions from attending physicians, including a family history of illnesses
Police records for any history of felonies and misdemeanors
Life insurance providers also share information with each other, so your current insurer can see your past and present applications – any contradictory answers can be uncovered right away. If a company discovers that you lied, they can deny your application. Lying can also get you blacklisted from applying for coverage with other companies.
In the event that your lie isn't found out and your policy is approved, there's still a chance that the company can find out later. There’s a two-year contestability period where the life insurance provider can revoke your insurance policy because of fraud. This means that your beneficiaries can be denied their death benefit claim.
How To Improve Your Life Insurance Quotes
If you have a bad driving record, there are some things you can do to improve your rates. Here are some ways that you can lower your premiums even with a complicated driving history.
Wait A Few Years Before Applying For Coverage
If you're a driver with DUIs or DWIs, it's advised that you wait three to five years to lower your quotes. However, this is a calculated approach – the older you are when you apply for life insurance, the higher the cost of your policy will be. Weigh your options and see if waiting will still be more affordable than having too many serious offenses on your driving record.
Live A Healthier Lifestyle
Most applications require a medical exam, which will reveal your overall health, current conditions, and risk factors. The less healthy you are, the more expensive your rates will be.
Improving your health can put you in a lower risk class. Eat a healthier diet and integrate more exercise into your diet for better medical exam results. You should also consider quitting tobacco use to get non-smoker rates, which will make insurance coverage much more affordable.
Manage Alcohol Consumption
Insurers always ask people about their substance use, including how much alcohol they drink. If a driver can demonstrate that they are a light drinker and do not have a history of alcohol abuse, insurers may offer more favorable life insurance quotes.
Your driving record affects your permanent and term life insurance rates. If you want to get an affordable policy despite a sketchy record, you can wait until your incidents fall off your record or control other risk factors such as health and alcohol consumption.
If you have questions about how your own history will be seen by life insurance underwriters, talk to a financial expert for advice. Wesley Insurance, LLC can tell you how your driving record affects your rates. We can also help you find the best life insurance coverage for your history – contact us today for more information!