March 31, 2011

How Automobile Insurance Rates Change For Drivers Who Avoid Accidents

Many car insurance providers offer rewards for customers who maintain a clean driving record. This is smart, because insurance companies save money when they insure good drivers, and incentive programs encourage drivers with a clean record to continuously practice good behavior. Safe drivers are often rewarded with lower automobile insurance rates. Not only is this practice beneficial to insurance companies and drivers, but it is also fair. After all, drivers who avoid accidents do not cost insurance companies any money. They actually make money for the insurance companies, so this behavior is rewarded. Likewise, insurance accidents cost insurance providers money and are often penalized by higher rates.

Drivers with poor driving records are often forced to pay higher insurance premiums and may have trouble finding new insurance providers. The following incidents that may cause a rise in insurance premiums include automobile accidents (with full or limited liability), speeding, moving violations, some non-moving violations, teenage drivers, driving without a license, drug possession charges, public drunkenness, underage drinking, or any other criminal charges. The severity of the rate increase directly corresponds to the severity of the crime. DUI charges often carry the steepest insurance premium penalties. Additionally, sports cars, motorcycles, and other dangerous vehicles will cost more to insure.

Drivers with clean driving records that have not been in any accidents and do not have any speeding tickets will be rewarded with lower automobile insurance rates. Drivers will also be rewarded with lower rates as they age, provided they maintain a clean record. Essentially, the longer you maintain a clean driving record, the lower your insurance rates will go. Additionally, honor roll students are often afforded lower premiums. These rewards are designed to encourage safe driving and responsible behavior in an attempt to lower insurance accidents.

Some insurance companies even allow formerly bad drivers to return to good graces by allowing bad drivers to improve their steep premiums by demonstrating an improved driving record. This is good news for bad drivers and good drivers alike, as bad drivers have an additional incentive to drive safe, and good drivers may have less stress on the road. Typically it takes a long time for formerly dangerous drivers to return to the good graces of insurance companies. In fact, it may take over 10 years to truly demonstrate an improved driving record, which is why it is important to maintain a clean record.

Although insurance companies have ulterior motives concerning these safe driving rewards programs, the programs are still beneficial to drivers and society as a whole. Incentive programs usually produce the desired results, and if the desired result in this case is safe driving, then insurance incentive programs are beneficial to everyone.