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Penalty Points Will Mean Increased Insurance Premiums

By: Garry Crystal - Updated: 7 Oct 2012 | comments*Discuss
Insurance Premiums Penalty Points Points

Insurance is one of the necessary financial expenses of running a car. Penalty points on a driving licence could give insurers a reason to bump up premiums but this is not always the case.

Penalty Points and UK Drivers

According to insurers there are now more than a million UK motorists who require just one more conviction to lose their licence. With over two million drivers per year caught speeding a clean driving licence now seems to be the exception rather than the norm. Statistics show that one in six UK drivers have penalty points on their licence. Insurers generally take the view that penalty points means reckless drivers meaning higher risk and more payouts. But some insurers are now claiming that penalty points are so common that they no longer increase premiums simply due to unclean licences.

Insurers and Driver’s Penalty Points

Some insurers claim that penalty points no longer equate to risky drivers. Whereas penalty points would previously have meant increased premiums this is no longer the case according to some insurers. Three and above penalty points would have pushed insurance premiums up significantly; in some cases as much as three times the original insurance costs. Now insurers say that penalty points are so common they cannot be used to solely judge the driver’s abilities. Even if this is the case it is still common practice to apply higher premiums to drivers with licence penalty points.

Insurers and Assessing Penalty Points

Insurers claim that they will assess the reason behind penalty points before they decide to increase car insurance premiums. Insurers also state that a rise in insurance premiums is not obligatory simply because a driver has penalty points on their licence. A number of factors will be assessed including the reason penalty points were applied to the driver’s licence. But insurers will have their own assessment criteria when calculating insurance premiums. It will be beneficial to obtain quotes from a few insurers before making a decision.

Criteria Used in Insurer’s Premium Assessments

Insurers will judge a driver’s risk factor similar to a lender using certain factors to gauge a customer’s credit risk. There are a number of different assessment factors that will be used when deciding on insurance premiums including:

  • The age and type of the car
  • The driver’s age
  • The amount of driving experience
  • The driver’s history including driving convictions
  • Existing penalty points and reasons they were applied to a licence
  • Previous insurance claims made
  • Credit history may also make a difference to the insurance premiums
  • Minor or first time driving offences may not actually make a difference to insurance premiums

Drivers Breaking the Law to Avoid Penalty Points

Drivers should not stoop to penalty points swapping to avoid licence points, disqualifications and increased insurance premiums. Penalty points swapping is when one driver takes the responsibility for driving instead of the actual driver when caught by a speed camera. A recent insurance poll found that around 12% of motorists in the UK will resort to penalty points swapping. This is illegal, and if caught there can be severe consequences. Points swapping means that insurers can be providing insurance for drivers who should be disqualified depending on the accumulated penalty points.

Using a Specialist Car Insurer

There are many insurers who simply will not insure drivers who have been convicted of certain offences such as drink driving. Drivers who have previously been disqualified for driving offences can also find it hard to find insurance at reasonable rates. For motorists who are worried about driving convictions there are insurers who specialise in drivers with penalty points and driving convictions. Specialist insurers are available and can be contacted through their websites. Again, it will be advisable to obtain a few quotes before deciding on an insurer.

Insurance premiums are not set in stone and an assessment will be used to calculate car insurance premiums. Licence penalty points will mean additional premiums in a great number of cases. But insurers are now cutting the previously high additional driver insurance costs when it comes to penalty points. Like all businesses, insurers will give different insurance prices, and drivers should shop around to obtain the best quote.

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