Car insurance points are how insurance companies grade each customer’s risk as a driver. Major auto insurance companies assign points based on certain behaviors by the driver, like filing accident claims or getting a speeding ticket. The points, in turn, help the insurance companies decide how much to charge drivers for a policy. The more points a driver has, the more they are likely to cost the insurance company, and the more they will have to pay for coverage as a result.
Auto insurance points are not the same as driver’s license points, though there is a lot of overlap between them. In 41 of the 50 states, the department of motor vehicles assigns and tracks license points. You get points for different traffic violations, such as speeding or driving under the influence. Once you cross the state’s limit for license points, your license gets suspended. The other nine states also keep track of traffic violations to determine when to suspend a driver’s license, but they do not assign a point value to each violation.
One of the biggest differences between insurance points and license points is that insurance companies track more than just traffic violations. They also take your insurance claims and accidents into account. If you file a claim for any type of accident, you’ll probably pay more for your next insurance policy. Even a one-car accident (from accidentally hitting a mailbox or a deer) has the potential to raise your insurance costs.
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