Texting while driving, and 4 other things that boost clients’ premiums

Client sent a text while driving and got caught? A conviction for that infraction beyond the police fine can cost a driver a 70% premium hike when it’s time to renew, said a new study from RatesDotCa.

The study was based on a hypothetical 35-year-old employed, single male driver who lives in Toronto, logs about 10,000 kilometres a year and starts out with a clean driving record. He parks in a private driveway, has been insured since 2003 and with the same insurer for two years.

That driver saw his annual quoted rate jump from $2,592 annual quoted rate to $4,406 following the distracted driving ticket (classified as a “prohibited use of hand-held device while driving”), according to the study.

So, losing a clean driving record can cost.

“Most insurance companies do not permit drivers to have even one major conviction like distracted driving,” said RatesDotCa auto insurance expert Kelsey Hawke. “Automatically, [this conviction] would force you to a higher-risk market where you would pay a higher premium for the same coverage.”

Here are some other things the study said can hike premiums:

• Missing payments – While insurance companies may allow for two missed payments, Hawke said the second could lead to policy cancellation with no option to reinstate. “Even if you make the payment up within its specified period – it still counts as a missed payment on your record,” she added. RatesDotCa’s quoter found a 36% hike (from $2,592 to $3,526) in the lowest quoted premium due to cancellation for non-payment. Plus, not all companies will take clients with non-payments on their records, and non-payment stays on the client record for three years.
• Material misrepresentation – Clients who give an insurer inaccurate information about where they live, who drives their car, or what the car’s used for can be cancelled and face a 22% rise in quoted premium at a new company that agrees to take their business, RatesDotCa said.
• Missing multiple-lines discounts – RatesDotCa said its quoter showed a 10% decrease in the annual quoted rate when their hypothetical driver bundled home or renter’s insurance with auto coverage.
• Not using winter tires – Depending on where a client lives, the semi-annual tire change is mandatory. But even in places where it’s not, the study noted drivers will miss a discount if they do use winter tires and don’t tell their insurers.

Feature image courtesy of iStock.com/RobertCrum