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How Much Do Traffic Tickets Affect My Rate?
by Larry LubellTraffic tickets are one of the things that show up on your motor vehicle report (MVR), but not the only thing.
The short answer is “The more tickets you have, the more you pay for car insurance. However, your MVR (Motor Vehicle Report) is only one factor impacting the rate of your insurance. All insurance rates, no matter what type, are based on three basic factors, Fixed costs, the amount of a potential loss, and the likelihood a loss will occur.
The fixed costs are the amount it costs to produce a policy. A company has to have a building, electric service, personal to enter the data, postage etc. These costs are, for the most part, unaffected by risk factors. The cost to process a policy is the same regardless of whether the risk is low or high.
The larger the amount of money an insurance company is on the hook for, the larger the premium they will need to collect. If an insured steps out one morning and finds that their 2002 Ford Taurus has been stolen, the insuring company’s exposure is $8,000. Imagine now that the missing vehicle is a 2006 Ferrari Enzo, suddenly the potential loss is over $1,000,000.00.
An equally important factor is “What is the likelihood a loss will occur?” Here is where tickets matter! Years of collecting data have shown that the more tickets one has, the greater the chance they will be involved in an accident. Younger drivers, will pay more than middle-aged drivers. Sports cars tend to cost more to insure than sedans. Cars that are frequently stolen, cost more to insure than lower risk autos.
All tickets are not equal. Parking tickets, improper display of license plates, do little to effect your rates. Speeding, stop sign violations, improper turns will increase your premium. Major violations such as DUI and reckless driving will drastically effect your rates and might prevent many companies from insuring you.
At Urban Insurance Agency, we can always get you covered, but a bad MVR will impact your rates.
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