There are a number of factors that go into what you pay for car insurance. Some of them can feel frustratingly out of your control — like where you live or your age. But the biggest thing that will affect how much you pay that you can control is how you drive.
Are you a risk taker? Is your foot made of lead? Do you never miss an exit because you’re not afraid to last-second cut across three lanes of traffic to get there? If so, you’re probably paying more.
In this article, we’re looking at how much high-risk violations can affect your car insurance, how they cost insurance companies and trends within the industry to be aware of. Stay tuned for a quiz at the end to estimate your risk level.
How being high risk affects you, the driver
First things first, what does it actually mean to be “high-risk”? Unfortunately, that’s not something you can just look up on your permanent record and find out.
It’s something insurance companies decide based on what they know about you and your driving history, and different insurance companies will weigh things differently. Young drivers will automatically be considered higher risk simply because they have less driving experience.
A history of claims or traffic violations will definitely factor in. Here are some examples:
A speeding ticket can increase your insurance costs by $431 a year.
An at-fault car accident increases auto insurance premiums by an average of $845 per year
Insurance rates increase an average of $1,428 per year after a reckless driving charge.
A DUI/DWI on your record can increase your rates an average of $1,681 per year.
These are just a few examples of how much your insurance premiums can change based on how you drive.
How high-risk drivers affect insurance companies
Now let's look at things from the other perspective. This is pretty obvious, but the reason you have to pay more if you drive badly or get traffic violations is because you are more likely to get in an accident and file a claim.
This is also why you can get put in this category even if you’re not a bad driver, just based on your claims history. Let’s say you’re an exemplary driver, but your car gets broken into three times and vandalized twice, and you file claims to repair the damages. An insurance company looking at your record, is going to assume you don’t have a safe place to park your car and that there is a high risk that it will be damaged again.
Paying attention to drivers who are more likely to file claims is particularly important now because insurance companies are facing losses to the tune of billions of dollars. Why is this? There are a few factors playing in:
Major weather events like hurricanes and wildfires have led to a high number of claims all at once.
Larger economic issues like supply chain lag with auto parts, labor shortages in car repair and general inflation have made cars more expensive to repair and thus claims more expensive to pay out.
The severity of claims has increased (40% increase in collision severity since 2019).
Car insurance is regulated at the state level to make sure insurance companies offer fair rates, but the process can be slow and doesn’t necessarily keep up with current economic conditions.
Trends in the insurance industry affecting high-risk drivers
Technology is continuing to change and improve how insurance companies deal with risk assessment. Here are a couple of trends to keep an eye on and how they might affect you.
Telematics, or devices in cars that monitor driving habits, are a growing trend in auto insurance. In 2022, they moved beyond the top ten insurance companies, so if the option wasn’t available to you before from your insurance company, it might be now. Telematics enables insurers to get a better picture of how you drive by providing real-time information.
How it affects you
If you are a reformed bad driver, the driver data provided by a telematics device might show you are a lower risk than you might appear based on your driving history.
Insurance companies are always using artificial intelligence in a number of ways, from customer service to fraud detection, but one that is picking up steam is risk assessment. Some insurers are using AI during the quotes process to gather more data points than a traditional quote form.
How it affects you
If you have some black marks on your driving history, this more well-rounded approach may or may not lead to you receiving better rates.
Thanks to a number of factors, insurance rates are high all around, but things are particularly tough if you're classified as a high-risk driver. If this is you, check out our list of best car insurance companies for high-risk drivers for some good options and tips on how to get the best rates.
Quiz: Are you a high-risk driver?
Try this quiz to see how risky your driving behavior is. Note: this quiz is just for fun. We will not record your information, and this will not affect your insurance rates in any way.