The effect of DUI on car insurance

 

Due to the reason that in the US every 29 minutes there may be a traffic casualty related to DUI, the insurance companies come down real hard on the issue, making it near impossible for a person with a DUI to get auto insurance.

 

How Do Insurance Companies Treat People with DUI

 

Insurance companies usually check a person’s motor vehicle records once every three years. At times a DUI conviction may not come to the insurance company’s notice, particularly if a DUI does not reflect on the person’s driving record. A study by the Insurance Research Council in June of 2002, revealed that one-quarter of the total driving convictions never show on the motor vehicle records. The reason being the lack information sharing between courts, and the motor vehicle department, or because, a DUI conviction was erased by way of expunging. But once the insurance company comes to know about a DUI, it usually goes on to treat the person quite harshly. Depending on a person’s DUI severity or history the insurance company may raise its insurance rates, cancel the policy or settle for non-renewal. In most cases an insurance company would cancel the insurance contract of its present client or decline the request of a new applicant on discovering a DUI on the person’s record.

 

Insurance Rates Don’t Always Go Up

 

Though it may be surprising but some auto insurance companies may not charge you higher premiums even after they find out about a DUI conviction. Most insurance companies will review your driving history and your record with the company in reference to your claims before making a decision. For instance if you have a preferred policy with State Farm Mutual Insurance Company and you receive a DUI, they might probably move your policy into State Farm Fire and Casualty. This is a standard policy company which handles riskier drivers with higher rates. With Progressive Insurance, you won’t face non-renewal or cancellation based on a DUI, but you may a higher rate. The Progressive Insurance reviews rates on a case by case basis, and may take into consideration age, gender, driving history and the automobile you are driving.

 

How Do Most Insurance Companies Handle a DUI Conviction?

Usually most insurance companies respond to DUI convictions by way of raising car insurance premiums and tagging the DUI individual as a high-risk driver. Even though insurance companies are forbidden by law to deny coverage to policyholders because of race, religion, residence, age or occupation, they can still cancel your policy if you have been convicted of drunk driving. They can also cancel the insurance policy right in the middle of the term or terminate it at the end of the term. The insurance company usually sends a notice to the person convicted of a DUI stating the reason for the cancellation. But with a DUI on the driving record, it’s hard to find a new insurer.

 

High Risk Drivers

 

Most states require DUI convicted drivers to get an SR-22 from their insurance agency, which ensures the disclosure of a DUI conviction to the insurance company. The SR–22 isn’t insurance, but a proof that you have certain type of insurance and is required when insurance is provided to an individual who was convicted of a DUI. It’s a form that must be submitted by the insurance company to the state motor vehicle department showing that auto liability insurance is in effect.