How a Bad Driving Record Can Affect Your Life Insurance Rates and Acceptability

Ross Quade | General | 24 Mar, 2016 | No Comments

If you thought that the only thing that life insurers care about is your health, then you are sadly mistaken. Unfortunately, they are concerned with other factors such as your driving record. Life insurers take your driving record into consideration in the same way that they consider the riskiness of your hobbies and occupation, all of which are “non-medical factors” that life insurers examine when determining your insurability. If you have a bad driving record, this will make life insurers consider you more of a risk and thus your premiums will be raised and in some cases you may not be able to obtain a policy at all. Let’s take a look at how a bad driving record has an impact on your life insurance.

The Insurer Will Look at Your Driving Record

You will have to answer questions about your driving history on your life insurance application. However, the life insurer will also look at your driving record by checking with your state DMV to see if you have any violations within your state. Due to this, it is essential that you be 100 percent honest on your life insurance application, even if you have some questionable activity on your driving record. Even in the case that it is questionable, you will win some brownie points for being honest, and the life insurer can get to work in determining your insurability right away.

Be Warned: a DWI or DUI Spells Bad News

There is a number of violations that may be on your record. The effect that any of them has on your life insurance application rests upon how severe the violations and the number of them that are on your record. However, one thing is definite, and that is that driving while intoxicated (DWI) and driving under the influence (DUI) will have a major effect on your insurance plan. If there is only one instance of it occurring and it happened several years ago, more than likely you’d get approved for a plan. However, you will still have to pay a substantially higher premium because of the violation. On the other hand, if you have multiple DUI/DWI’s or a recently occurring one, you may be deemed uninsurable.

Other Violations That Could be an Issue

Most other driving violations are not as severe as a DWI or DUI, but they still will have an impact on your application. For instance, if you have a traffic violation against you for speeding ten miles over the speed limit, then this may have no impact on your application. However, if you have two or more in the past five years, then your premium will likely be higher than it would have otherwise been to make up for the increased risk that has arisen from your driving history. In general, multiple driving violations are not a good sign for life insurers. If you have over four violations within the past year, then your application will most likely be declined altogether as it is a sign of reckless behavior.

Only Your Recent Driving History Will Be Used

One good thing for many people seeking life insurance is that most life insurance agencies will only look at recent driving history, and not everything to date. This means that if you got into an accident when you first got your license, you wouldn’t have too much to worry about. However, if you have a mark on your driving history within the past few years, life insurers will take it into consideration.

How Your Driving History Will Impact Your Rates

You likely will not be able to obtain a policy for a preferred rate if you have multiple driving violations on your record, as it is a sign that you are at a higher risk for an early death. If you have had two or more violations in the past three years then in the best case scenario you will have to deal with a higher premium. If you have more than four violations, in all likelihood you will not be able to obtain traditional life insurance.

Your Options If You Have Driving Violations

If you have more than one driving violation on your record, then you may want to consider “getting clean for a couple of years before obtaining a policy. This means driving lawfully and carefully so that you can get a few years with no driving violations under your belt. In most cases, your driving history will not be searched back further than five years and so time is your best friend when it comes to your life insurance policy and driving.

When Claims May be Denied

In most cases as long as you did not hide anything on your life insurance application, such as a drinking problem, and you have been paying your premiums for over two years, the majority of companies will payout your death benefit no matter how you died. However, there are instances in which life insurers have fought claims because the insured person died due to being under the influence when they got into an accident. On top of this, if you were distracted by texting or talking while driving and passed away from getting into an accident, life insurers may try to fight the claim in court. Distracted driving has become a rising cause of auto accidents and deaths, and so life insurance companies are cracking down harder on such occurrences. This gives you one more reason to put your phone away while driving.
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