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How a DWI Conviction Affects Your Insurance

By: Insure.com

(The following article and additional materials about DWI Convictions and your Automobile Rates have been re-printed here with permission from www.Insure.com. Visit their web site for highly competitive rates for auto, life and health insurance).

Many insurance companies check your motor vehicle record only once every three years or when you're applying for a new policy (or changing insured vehicles, adding a new driver or making a claim for coverage). Sometimes, accidents, tickets, and drunk-driving convictions can escape your insurer's attention or don't end up on your motor vehicle record. However, if your insurer does find out about a driving under the influence (DUI) conviction, you're likely to feel the pinch of higher rates and possible policy cancellation or non-renewal.

There are two ways insurance companies generally deal with customers convicted of DWI. First, your insurer will likely raise your insurance premiums and label you a high-risk driver if it finds out you've been convicted of DUI. In this case, you'll likely have to file proof of insurance for three — sometimes five (in some states) — years with your state's department of motor vehicles. Your insurance company will have to provide the DMV with an SR-22 form, which removes your license suspension by providing the state with proof of insurance. An SR-22 also means your insurance company is required to notify the DMV if it cancels your insurance for any reason.

Most state laws require DUI convicts to get an SR-22 from their insurers, so you can't hide. In addition, your company may cancel your insurance mid-term or terminate the policy at the end of the term because of your DUI conviction, especially if you are currently in a preferred class. Your company will send you a notice stating why you've been canceled, and then you'll have to find another insurer while having a cancellation on your claims history.

Some insurance companies don't offer SR-22 policies, so you may also be non-renewed or canceled because your company can no longer provide what you need.

Certain states don't allow insurance companies to drop you in the middle of the policy term even for a DUI, so make sure you know the laws in your state.

Insurers can miss DUI convictions

It's possible that your insurance company will never find out about your conviction if you don't have to get an SR-22. A June 2002 study by the Insurance Research Council revealed that as many as one-quarter of driving convictions never end up on motor vehicle records, due to lack of shared information between courts and motor vehicle departments or because a conviction has been erased through alternative means, such as driving school. If you get your charge reduced in a plea bargain, or have a limited license suspension (such as an ALR or ALS suspension), such as 30 days, it's also very unlikely your insurer will find out about your conviction.

If your insurance company misses the conviction at the time it happens, it has three years, according to most state laws, to cancel your policy or raise your rates because of the DUI. In other states, the time limit is five years.

Rates don't always go up

You may be surprised to know that when your insurer does find out about a DUI conviction it doesn't automatically impose higher premiums. The insurer will look at your history with the company and your claims record, and your fate is in its hands.

For example, State Farm's action depends on which subsidiary you're with. If you have a preferred policy with State Farm Mutual Insurance Co. and receive a DUI, State Farm may move you into State Farm Fire & Casualty, which is the standard-policy company. If you're moved from preferred to a standard status, you'll be paying higher rates already. State Farm will also review your motor vehicle and insurance claims history to determine if it needs to raise your rates further.
[Source: http://info.insure.com/auto/duiconviction.html}

[Note from Mr. Head: In multiple vehicle families, the additional cost of insurance after a DUI can be staggering. For one South Carolina dentist Mr. Head represented in the mid-1990s, the additional cost for his family’s 6 vehicles would have been $52,000 per year, if his DUI arrest in Georgia became a DUI conviction. South Carolina has ‘integrated’ insurance laws wherein all convictions MUST be reported by DPS to your insurance carrier and the rates paid MUST be increased by your carrier, in accordance with a legislated formula designed to penalize high risk drivers. Fortunately, the DUI case was dismissed at pre-trial motions filed and argued by Mr. Head.]

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[The following letters relating to DUI and automobile insurance, addressed to www.Insure.com were answered as part of its “Auto Insurance Forum”]

Auto Insurance Forum

Dec. 18, 2001

Q: I was recently arrested for DUI and my car was seized. Will my auto insurance rates go up as a result of this?

A: Bob, North Carolina

Dear Bob,

Whether your rates go up depends on two factors: if your insurance company finds out about your arrest and what its rules are for drivers who are arrested for a DUI.

Insurance companies generally check motor vehicle records on their policyholders about every three years, so a DUI arrest might go unnoticed. However, even if your insurance company does notice your DUI, there's no guarantee that it would cancel your policy or raise your insurance rates. Rules vary by insurance company, but insurers say they generally look at a policyholder's total driving record and claims history when considering what penalty, if any, they will assess for a DUI.

You mentioned that you have been arrested, but you did not say whether you were convicted. That may make a big difference in the eyes of your insurer. Your insurance company probably won't take any action until you have been convicted. {Source: http://info.insure.com/lawsuits/auto/forum/121701/dui.html}

Insure.com

Jan. 22, 2001

Q: I was recently convicted of a DUI for the first time. I have had a perfect driving record for 53 years. Should I write to my insurance company with an explanation of the circumstances before they learn of the conviction?

Sam, California

A: Dear Sam,

You may want to explain your DUI conviction only if your insurance company finds out about it. Insurance companies generally check motor vehicle records on their policyholders about every three years, so your DUI conviction might go unnoticed.

However, if your insurance company does notice your DUI, there's no guarantee that it would cancel your policy or raise your insurance rates. Rules vary by insurance company, but insurers say they generally look at a policyholder's total driving record and claims history when considering what penalty, if any, they will assess for a DUI conviction.

{Source: http://info.insure.com/lawsuits/auto/forum/012201/dui.html}

Insure.com

 

March 12, 2001

Q: I live with someone who recently had a DUI and now my insurance company will not renew the policy for my vehicles. What should I do? Do I need to change my address to get away from the DUI factor?

Mark, Minnesota

A: Dear Mark,

Yes, either you or the person with whom you live will have to move for you to get away from the "DUI factor."

Bruce Gordon, a spokesperson for the Minnesota Department of Insurance, says that Minnesota Statute 65B.15 allows insurance companies to cancel or non-renew your policy if you live with someone who has a DUI and that person does not have his or her own insurance, regardless of whether the person is listed on your policy.

Gordon says your only other option in this case is to purchase high-risk auto insurance, which will be more expensive than what you've paid previously.

{Source: http://info.insure.com/lawsuits/auto/forum/031201/dui.html}

 

Insure.com

April 11, 2001

Q: I was in a two-car accident in which I was issued a DUI. Can my insurance company deny my claim because of the DUI?

Chad, Texas

A: Dear Chad,

Lee Jones, a spokesperson for the Texas Department of Insurance, says that an insurance company cannot deny your claim because you were issued a DUI after the accident. Your insurance company has an obligation to pay for your damages, regardless of your condition at the time of the accident.
{Source: http://info.insure.com/lawsuits/auto/forum/040901/dui.html}