Points and how they work

Insurance point systems are used by many auto insurance companies, and sometimes by state Departments of Motor Vehicles (DMVs), to track driving violations and at-fault accidents. These systems help insurers assess risk and determine premiums, while state DMVs use them to identify high-risk drivers who might face penalties like license suspension.

Here's a general overview of how they typically work:

1. Assigning Points:

   • When you're convicted of a moving violation (like speeding, running a red light) or found at fault in an accident, the insurer (and sometimes the state DMV) may assign a certain number of points to your driving record.

   • More serious violations or accidents generally result in more points. For example, a DUI or reckless driving conviction would typically carry a higher point value than a minor speeding ticket.

2. Impact on Premiums (Insurer Point Systems):

   • Surcharges: Insurance companies often use their own proprietary point systems (or similar methodologies) to calculate surcharges on your premium. The more points you accumulate, the higher your premium is likely to be, as you're considered a higher risk to insure.

   • Tiering: Insurers might place you in different risk tiers based on your points, with higher tiers paying more.

   • Loss of Discounts: Accumulating points can lead to the loss of good driver discounts.

   • Non-renewal or Cancellation: If you accumulate too many points, an insurer might decide not to renew your policy, or in some cases, cancel it (though cancellation rules are strict).

3. Impact on License Status (State DMV Point Systems):

   • State DMVs often have their own point systems. If you accumulate a certain number of points on your state driving record within a specific timeframe, you could face penalties such as:

     • Warning letters

     • Mandatory driver improvement courses

     • License suspension or revocation

4. Duration of Points:

   • Points typically remain on your insurance record or state driving record for a set period, often 3 to 5 years, but this can vary by state and by the severity of the violation.

   • After this period, the points may "fall off" your record or no longer be used to calculate your premium or count towards state penalties, assuming no new violations occur.

5. Variations:

   • By State: Point values for specific offenses and the thresholds for penalties can vary significantly from state to state.

   • By Insurer: Insurance companies have their own internal rules and underwriting guidelines for how they weigh different violations and accidents, which may or may not directly mirror the state's DMV point system. Some insurers might not use a formal "point" system but will still rate your policy based on your driving history.