By how much might three penalty points increase your car insurance?
Speeding violations have reached record highs in recent years, and millions of drivers in the UK now have penalty points on their licence as a result of speeding as well as a range of other motoring offences. But what affect are those points likely to have on the cost of their car insurance?
More than 2.6 million UK drivers have penalty points on their licence, according to data from the Department for Transport. Apart from the immediate cost of paying the associated fine, the new penalty points on your licence will undoubtedly increase the cost of your car insurance – either immediately, in the case of a telematics insurance policy and some monthly payment policies, or at the time of renewal for some annual car insurance policies.
By how much will my car insurance premium rise after I receive penalty points?
While having your licence endorsed with penalty points will almost certainly push your premium up, there are a range of other factors at play that could influence the size of that increase. The nature of your motoring violation can be a factor, for instance, and whether or not you already had points on your licence prior to receiving these new points will also be a major consideration.
The specific insurer you go with will also be a big factor, because each insurer calculates the insurance premium slightly differently, and they all have their own unique level of risk tolerance as well.
You stand a better chance of finding the right policy at the right price if you compare providers that specialise in insuring motorists with penalty points
Insurers take into consideration your age, job, address, make of car and a wide range of other variables when calculating premiums, but the weighting they give to each of those variables can vary from one provider to the next. The type of penalty also makes a difference in calculating premiums. So while one driver might have three points on their licence, another with six points might have lower premiums owing to all the other factor insurers consider.
However, bearing all that in mind, research suggests three points could raise a driver’s car insurance premium by an average of 5%, while six penalty points could push the cost of insurance up by an average of 25%.
Does the level of cover alter the affect of penalty points?
No, whether you have a fully-comprehensive car insurance policy, a third party, fire and theft policy or a third party-only one, the cost of your car insurance will almost certainly rise after you receive new penalty points, but the nature of the motoring offence and the total number of points on your licence after the new points have been added are likely to be more important considerations for the insurer.
When are points added to my licence, and how long will they stay on my licence?
Points can be added to your licence either from the date you were caught or from the date of conviction, depending on the specific motoring offence. The length of time they stay on your licence will also vary. For most driving convictions they will stay on for four years, but for serious offences relating to drink, drugs or causing death by dangerous driving it can be up to 11 years.
Do I need to inform my current insurance provider about the new penalty points?
It goes without saying that you’ll have to disclose your penalty points when you come to renew your car insurance, as failure to do so would be classed as non-disclosure and could result in your insurance being cancelled.
However, some drivers assume that they don’t have inform their current insurance provider about the new endorsement, since they’ve already paid for that cover at the start of the policy. However, the vast majority of insurance companies do have a clause in their policy agreements requiring policyholders to inform them immediately about any new convictions or penalty points, and failure to disclose this to your current insurer could result in your policy being cancelled or future insurance claims being rejected.
Is there anything I can do to reduce the impact of penalty points on my car insurance premium?
Different insurance providers have different risk tolerances, and they also calculate insurance premiums in slightly different ways, so if you’ve recently had new penalty points added to your licence it is now even more critical that you shop around for car insurance quotes rather than automatically accepting your existing provider’s renewal price.
Some providers won’t insure young drivers with penalty points, for instance, or will offer sky-high insurance quotes to these motorists in order to dissuade them from using that provider. By contrast, some other providers may specialise in insuring convicted drivers and motorists with penalty points, in which case they might be able to offer a much more competitive quote than the provider you used before you had your licence endorsed.
This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.
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