What are Insurance Points?

What are Insurance Points?

North Carolina uses a point system to encourage safe driving. There are two types of points – driving record points and insurance points – and they are very different. Most people are familiar with driving record points; if you are ticketed or have an accident, you are penalized with points against your license. Too many points and your license is revoked. Insurance points, on the other hand, may result in a hefty insurance rate increase, based on your infraction.

The NC Department of Insurance created the North Carolina Safe Driver Incentive Plan (SDIP) to encourage drivers in the state to practice safe driving habits. Insurance points are charged for most at-fault accidents and traffic ticket convictions based on a rigid point scale. If you are ticketed for speeding between 1 and 10 miles per hour over the speed limit in a zone marked 55 MPH or less, you will “earn” one point; passing a stopped school bus earns you four points; driving while impaired (DWI) earns you 12 points. Your insurance rate will increase based on the number of points earned – from a 30% increase for one point to a 340% increase for 12 points. Read more about the North Carolina SDIP and insurance points.

There are certain instances where no SDIP points will be charged, including:

  1. You have an accident where you are not ticketed that results in property damage only in the amount of $1,800 or less, and no one in the household (on your insurance policy) has received any SDIP points during the prior three years;
  2. You were ticketed for speeding less than 10 MPH over the posted speed limit, there were no other moving violations in the past three years and the incident did not happen in a school zone;
  3. No other drivers in your household have used a Prayer for Judgment Continued (PJC) in the past three years.

Many people who receive traffic tickets believe it’s just easier to pay the ticket and move on. Before doing this, however, you need to understand the potential impact to your auto insurance bill. Paying the ticket is an admission of guilt, as is asking for a Prayer for Judgment Continued. If you were ticketed for following too closely and pay the ticket, you will receive two insurance points. This equates to a 45% rate increase that will stay in effect for the next three years (and could be compounded by future tickets or accidents). While a PJC might mean the insurance points are not added this time, an additional ticket in the three years following the PJC would result in insurance points being added, and only one PJC per household is allowed in a three year period. It may be worth your time to contact a traffic law attorney to learn your rights.