5 Bad Decisions That Will Impact Your Car Insurance Rates

5 Bad Decisions That Will Impact Your Car Insurance Rates
Car insurance premiums (Photo: @FreedomTumZ via Twenty20)
While an accident might seem like the quickest way to raise your car insurance premium, there are a few other factors that could make an even bigger impact on your auto insurance rates. Driving uninsured, having bad credit, or getting behind the wheel while under the influence are just a few instances that will raise your auto insurance premium. In fact, with many insurance companies, some bad decisions may even cost you your auto insurance coverage altogether.

1. Driving Under the Influence

Deciding to drive while under the influence of alcohol or drugs is one of the worst decisions you can make. Danger to yourself and others aside, you could also face legal fines and penalties if you’re caught, as well as lose your license. In addition, drivers who get a DUI often find themselves in special group of high-risk drivers who can say goodbye to cheap car insurance rates and discounts; you’ll be forced to pay higher car insurance premiums for a number of years.
In addition, in order to get certified for insurance after a DUI, you need to file an SR-22, FR-44, or FR-19 form, depending on your zip code (i.e., the state you live in). The most common of the three, an SR-22, provides proof that you carry the state-mandated minimum amount of car insurance. And while a car insurance company can file this for you, it is not free.
You can expect your car insurance premiums to nearly double in the first year after a DUI. The higher premiums go away after time, but even three years later, you could be expected to pay significantly more than usual and miss out on special car insurance discounts.

2. Having a Bad Credit Score

Before you rack up excessive credit card debt or decide to not pay your bills, keep in mind that drivers with “excellent” credit tend to pay an average of $214 less than drivers with “good” credit, according to Consumer Reports.
A poor credit score can negatively affect your car insurance premiums even more than a traffic violation on your driving record. On average in the United States, a driver with fair credit can expect to pay 27.6% more than someone with excellent credit. That comes out to about $232 more in premium payments every year.

3. Letting an Excluded Driver Borrow Your Car

Letting a driver who is forbidden from driving your vehicle get behind the wheel can lead to trouble if they have an accident while driving it. In such situations, the auto insurance company usually denies the claim, leaving you and the excluded driver to pay for any injuries or damage resulting from the accident, even when you have comprehensive coverage or collision coverage.
Cases that can lead to a driver exclusion in the first place include drivers who have one of the following:
  • Suspended license
  • Bad driving record
  • DUI

4. Not Transferring the Vehicle Title

Selling a car but not transferring the title and removing it from your auto insurance can result in extensive problems if the new owner has an accident while the vehicle remains under your name. Your car insurance company might not cover the accident in such a case, leaving you responsible for any medical bills or property damage.
Following the proper procedure of signing the title over to the new owner and removing the vehicle from your insurance policy represents the best way to protect yourself in such a situation.

5. Driving without Insurance

When purchasing a new or used car, you only have a certain number of days to purchase coverage for the car, or add it to your existing auto insurance policy. The time limits to do this task varies by state, but for the most part, you have anywhere from 14 to 30 days to insure a car that comes into your possession.
Most insurance policies specify automatic extension of coverage to a car you buy if you already have an insurance policy in place. Neglecting to properly transfer a vehicle to your car insurance policy usually results in a lapse of coverage, meaning if you have a wreck once coverage lapses, the insurance won’t cover it.
Making a bad decision can negatively impact your insurance premium. Avoid those pitfalls by following all procedures when purchasing a car and making sure you have the proper amount of insurance. Most importantly, make sure you follow safe driving protocols and always avoid driving while under the influence of alcohol or drugs.