Nobody is perfect, and most people get at least one traffic ticket in their lifetime. But the truth is that your driver’s license can significantly affect your life insurance. If you have current life insurance and you get a speeding ticket, it won’t affect your rates. On the other hand, if you are applying for a new policy or additional coverage, you can be sure that your driver’s license is one of the factors that the insurance company will consider.
How do life insurance companies view your driving record?
Life insurance underwriters think in terms of numbers and percentages. They bind 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 significant amount in premiums. For this reason, insurers charge higher rates when they determine that there is a greater risk.
When 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 United States in 2017, the most recent year for which statistics are available. This corresponds to an 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 revoked for a good reason. In some cases, your license will be suspended simply because you have forgotten to pay a fine or have a medical condition unrelated to your driving record. If so, our experienced agent can work with you to try to minimize the impact of the suspension.
- Reckless Driving: This term means driving in a manner that shows disrespect 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 speeding at high mph. This type of violation adds considerable risk to your profile and increases your life insurance premiums.
- Moving Violations: For life insurance companies, moving violations demonstrate a breach of security and increase your risk profile. These violations include speeding, texting while driving, running red lights or stop signs, tailgating, improper lane changes, and not wearing 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 and how does it affect your life insurance rates?
“MVR” is short for motor vehicle report. It is the report on your driver’s license that is maintained by the state and sent to insurance companies on request. You agree to this as part of your life insurance application.
To qualify for the best price class (Preferred Plus), you must not have had any major breaches of your MVR in the last five years. Major violations include DUI, reckless driving, and license suspension or revocation. Too many moving violations can also increase your life insurance premiums. Most insurance companies don’t care about one or two speeding tickets, but if you have more than two violations in the last three years, your rates will go up. If you have more than four in the last three years, your application will likely be rejected.