Streetsmart insurance Blog
Earning points is a good thing, but it’s never accurate when it comes to your insurance policy and your driving record. As much as possible you don’t want to collect points from either system. The fewer points you have, the better your record is to both the insurance company and the state you live in.
However, most people are getting the two systems interchanged. If you have the same dilemma, you’re in the right place! Read on to know more about the difference between car insurance points and driver’s license points.
Know Your Car Insurance Points
Insurance points are violation points assessed by your insurance company against your driving history, such as car accidents you’ve been involved in or traffic violations you’ve committed in the past. If you have a high score, the company will consider you as a “high-risk driver” and will charge you a higher auto insurance rate.
Generally, insurance companies are able to track your points through two main reports - Motor Vehicle Record (MVR) and the Comprehensive Loss Underwriting Exchange Report (CLUE).
An MVR keeps a permanent record of your driving history, but it only reports your driving record for the past three years. Your DMV points system is based on this record. A CLUE report, on the other hand, goes beyond your driving record and shows insurance claims you've previously made. A Clue report collects 7-years worth of data.
Take Control of Your Driving Record
It is important to note that your DMV points can directly affect your insurance company record. Your state’s DMV (Department of Motor Vehicles) keeps a record of all traffic convictions and accidents you’ve had in the past. If you’ve gotten a ticket due to “reckless driving” for example, DMV will likely assign corresponding points to your license. Likewise, your insurance company will add points to its internal record of your driving history because of your violation.
Tickets stick around your driving record unless you do something about it. Remember that insurance companies look into your driving history for the past 7 years. If you got a traffic ticket 4 years ago, it could still appear on your insurance report even though it might not be visible anymore on your current MVR. Hence, it is essential that you address the issue right away to keep a clean record.
How Does Car Insurance Points System Works?
Auto insurance companies have their own point system to decide how much rate they’ll give you. Most companies follow a guideline set by the Insurance Services Office (ISO) to assign their points system, while others create their own unique metrics.
Aside from your traffic violations, companies can also add points on your insurance record due to other incidents or factors, such as:
Hence, it is possible that you have zero DMV points, but you have points on your car insurance record. Auto insurance companies can access this information from your CLUE report.