By Frank LingWhen we first learned to drive one of the basic things we’re told or taught is that getting a speeding ticket will automatically affect our insurance rates. This seems reasonable and logical.
Some of us go to traffic school to remove the evidence of our errors and even more important, we do this so the insurance company doesn’t penalize us.
But according to one insurance professional, this bit of common sense may not be so true after all.
The DMV Records
The one thing all car insurance companies want to do is to keep their costs down so they can realize bigger profits. There’s nothing necessarily wrong with that, although some may argue this point because they see these institutions as money hungry.
Whether this is true or not, we’ll leave this up for debate. However, keeping costs down is vital for these firms.
When you get a speeding ticket, the only way the insurance company will know about it is if they submit a request to the DMV for your driving records.
If they request a driving record for every citizen in your state to find out who the offenders are, this will cost them anywhere from $3 to $28 per record. It’s obvious that the costs involved in tracking down speeders to increase their insurance rates would be totally offset by the total costs of getting all the records.
Insurance Roulette
So why does it seem that drivers who speed have higher rates? It’s the luck of the draw. Instead of requesting a record for every driver, the insurance companies simply pull a random number of insured drivers to be checked from DMV records. If you happen to have had a speeding ticket and you're one of the "lucky" ones to be selected, your rates go up.
Matthew Neely, owner of ECO Insurance said:
These charges can get very expensive for insurance companies, so a lot of the time the carrier will randomly select households and run the MVRs (motor vehicle registrations).
The illusion is everyone who gets a speeding ticket gets higher insurance rates. So if you do get a speeding ticket, you may not have your rates go up. Neely continued:
If you are lucky enough, the insurance company will not find out about your speeding habit. However, if you let your insurance lapse, get into an accident or change insurance carriers, the carrier will run the MVR."
But in saying this, it’s probably better to just drive safely and not speed because you’ll never know if you’ll be in the random sampling by the insurance company.
Source:
Daily Finance