As an ex-employee of an insurance broker I can give you the insight of a behind the scenes look at how your insurance premium is calculated when speeding offences are present.
Motor insurance is calculated by assessing the risk factors presented by the driver for whom the policy will cover.
Motor insurance underwriters are paid vast sums by insurance companies to evaluate the likelihood of a claim being made against the active insurance policy.
Risk comes in many forms. The age of the driver, the car that is insured, where the car is kept overnight, the convictions that are active on the licence of the drivers insured, etc.
Let us now discuss the impact and risk factor for the conviction of speeding being present on the licence of a driver covered by the insurance policy.
Assessors predict that when there are speeding convictions present on the drivers licence, there is a greater likelihood that an accident will occur. A speeding driver is more likely to lose control of the vehicle and cause damage. This will result in the insurance company awarding financial damages to a third party. This in turn, results in an extra cost being added to the price of the policy. The insurer is working on the assumption that the chances of having to pay out money due to your reckless speeding habits are high.
One speeding conviction is not normally penalised when being assessed by the underwriter unless it carries a six point penalty (see below). Anyone can be misfortunate enough to be caught out once. But have two or more convictions present, and a pattern begins to emerge. Alarm bells ring in the undertaker’s ears and a policy loading’ or extra cost is added to your insurance price.
The underwriting system works on a point’s basis. The actual code of the speeding offence is immaterial to the underwriter. The points awarded for the offence are what they are interested in. The normal speeding conviction carries a three point penalty; this will not set the underwriters alarm bells ringing. Once you reach the six point marker, you have triggered the alarms and you will have to pay an added fee.
The news is not all bad for the convicted motorist though. Insurance companies only want to know about the past three years of your driving adventures with regards to convictions. Any old offences that happened before this three year historical point need not be declared to them.
In most cases of driving convictions the law classifies that after three years of the speeding conviction being applied, the driver has learnt their lesson and the slate is wiped clean so to speak.
The best form of defence against higher insurance prices is of course not to get caught speeding in the first place. Speed kills, slow down a little. The speed limits are there for a reason, public safety!