The Usage Based Insurance Happiness Factor: Traffic Violations

When drivers get tickets, their car insurance gets more expensive. No surprise there – traffic violations bear an impact on insurance rates, as just about every driver knows. However, what might surprise your customers is just how much a single violation can affect how much they pay.

How much damage can a traffic violation do?

We’ve posted a revealing infographic from The Hartford below to answer that question. But before you peek, let’s test your knowledge. Of the following infractions, can you guess which is harder on a driver’s pocketbook?

1. Which is worse: tailgating or failing to yield?

2. Which costs more: driving without a license or driving without insurance?

3. Which tops the list: reckless driving or DUI?

Ready for the answers? 

1. Tailgating is worse than failing to yield, with an associated rate increase of 13 percent – versus only 9 percent for shouldering your way past a yield sign.

2. Driving without a license is more expensive in the long run, raising you’re a policyholder’s insurance rate by 18 percent. Driving without insurance? That comes with a rate penalty of only 6 percent.

3. It’s bad news for reckless drivers. It turns out that one instance of reckless driving could raise a driver’s premium by 22 percent, which is actually higher than for DUI, which amounts to a 19 percent hike.

Short-term caution vs. lasting happiness

If you tell your policyholders how violations impact their rates, they may drive more cautiously – at least for a little while. It’s one thing to mean to be more cautious, though, and another thing to follow through and permanently change driving behavior. No one knows when they’re going to get ticketed. If they did, they would modify their behavior in the moment to avoid it. Most often, drivers don’t get ticketed for fluke choices. Rather, the tickets they get are often a reflection of their everyday driving habits.

So, if you want your policyholders to experience true driving Zen, introduce them to usage based insurance. Once they realize that their rates will be based on daily driving habits, they will have the incentive they need to behave better, every day. That brings down the risk of getting ticketed in the first place, empowering policyholders to keep their premiums where they want them: nice and low.

Sure, anyone can set out to “drive better.” But for most people daily monitoring, coaching and repetition is needed to achieve a lasting improvement. Usage based insurance gives drivers the tools to drive better and insure happier. Stay tuned for part two of this series … we’re talking claims.