If there's anything that could drive your car insurance
cost sky-high it's a drunk-driving (DUI) conviction.
According to the Insurance Information Institute, there is
an alcohol-related traffic fatality in the United States
every 29 minutes. Aside from the risk of killing yourself
and others, drunk driving carries with it serious penalties
from your car insurance company.
Car insurance companies may check your motor vehicle record
only once every three years or when you're applying for a
new policy. It's possible that accidents, tickets and DUIs
may never make their way to your official motor vehicle
record. However, if your insurer does discover your DUI and
classifies you as a "high-risk driver," shopping around at
renewal time is the best strategy, as car insurance rates
will vary greatly among insurers. On the other hand, a rate
hike may be the least of your problems; your policy could
be cancelled or nonrenewed, especially if you are currently
in a preferred car insurance rate class. Then you'll be
forced to look for new car insurance with the double-whammy
of a DUI and a cancellation on your record.
Laws regarding DUIs and car insurance coverage vary by
state. Most states require DUI offenders to get a form
called an SR-22 from their auto insurers, so you can't
hide. This form proves to the DMV that you carry liability
insurance and removes your license suspension. An SR-22
also requires your insurance company to notify the DMV if
it cancels your auto insurance for any reason. You'll
likely have to file proof of insurance for three —
sometimes five — years with your state's DMV.
SR-22 laws
Delaware, Kentucky, Minnesota, New Mexico, Oklahoma and
Pennsylvania don't require SR-22s, but if you have an SR-22
and then move to one of these states, you must continue to
meet the requirements of the SR-22 state where the offense
was committed. New York and North Carolina don't require
SR-22 filings at all. In some states there is a fee for
SR-22s. (Source: Progressive)
Some car insurance companies don't even offer SR-22
policies, so you may be nonrenewed or cancelled because
your company can no longer provide what you need.
Insurers can miss DUI convictions
It's possible that your insurance company will never find
out about your DUI conviction if you don't have to get an
SR-22. A June 2002 study by the Insurance Research Council
revealed that as many as one-quarter of driving convictions
never end up on motor vehicle records due to lack of shared
information between courts and motor vehicle departments,
or because a conviction has been erased through alternative
means, such as driving school. If you get your charge
reduced in a plea bargain, or have a limited license
suspension, such as 30 days, it's also very unlikely your
insurer will find out about your conviction.
If your insurance company misses the conviction at the time
it happens, it may still have a few years to raise car
insurance rates if the DUI is discovered later.
Your ultimate destiny rests with your car insurance company.
For example, State Farm's action depends on which
subsidiary you're with. The insurer reviews rate-increase
decisions on a case-by-case basis. If you have a preferred
policy with State Farm Mutual Insurance Co. and receive a
DUI, State Farm will likely move you into State Farm Fire &
Casualty, which is its standard-policy company for riskier
drivers and higher car insurance rates.
If you're with Progressive, you will not face nonrenewal or
cancellation because of a DUI, but you may face a rate
increase. Progressive also reviews car insurance rates on a
case-by-case basis, with multiple factors such as age,
gender, driving history and your vehicle model going into
your rate.
It doesn't end there. Your DUI conviction will follow you
if you apply for life insurance and could affect your
premiums there, too.
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Amy Danise is a staff writer for http://insure.com . Visit
http://insure.com for a comprehensive array of comparative
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