How Can a DUI Impact Your Car Insurance?

How Can a DUI Impact Your Car Insurance?
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How Can a DUI Impact Your Car Insurance?

How Can a DUI Impact Your Car Insurance?
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If you are caught Driving Under the Influence (DUI), meaning that you were operating a motor vehicle after consuming alcohol or drugs, it could mean serious consequences with insurance. DUI charges almost always lead to an increase in auto insurance rates and a potential suspension of your license depending on the severity of the DUI charge. 

With a DUI, your auto insurance will, almost always, increase and can increase significantly. According to Forbes, your insurance rate can increase up to 74% and lead to fines, suspensions, or jail time. With a 74% increase, that is approximately $1,470 a year of additional costs to your insurance. 

Each state has different laws for DUI charges. Common names used for car insurance companies to describe a DUI charge can also be driving while intoxicated (DWI) and operating under the influence (OUI). Most of these terms have the same meaning, where an individual was caught driving with alcohol or substances over the state limit. 

The reason for these high premiums on your insurance rates is that your auto insurance company takes driving under the influence as a very serious and dangerous charge. When you are impaired while driving, you endanger both yourself and the drivers around you and as such if an accident were to happen then the insurer would have to settle the payouts. Insurance companies, in an attempt to minimize these accidents, increase the premiums as a warning for first offenses. 

In this guide, we will discuss all the ways in which receiving a DUI can have an impact on your auto insurance.

DUI vs DWI

Although these terms are commonly used interchangeably, in reference to car insurance, there are some key differences between them. A  DUI is used to refer to driving with either alcohol and/or drugs within an individual’s system, whereas a  DWI is used to refer to alcohol. Since a DUI is the umbrella term, it is important to note that the drugs do not have to be illegal to constitute a DUI charge. 

How Does a DUI Affect Car Insurance?

When you are charged with a DUI, insurance companies view you as a riskier driver and as such will charge more for insurance. In some cases, if you have had a prior DUI and are switching to another insurance company, the new insurer may refuse your coverage. 

When auto insurance companies calculate the rate of increase for your insurance, there are a few factors that go into the decision-making process. According to Progressive Insurance, these factors include “the amount of time passed since the DUI as well as your age and driving history will factor into the amount of the increase. For example, if you’ve never had any accidents and speeding tickets, and your DUI is the only hit on your record, your rate likely won’t go up as much.

Once the DUI violation no longer shows on your motor vehicle report, you should see a decrease in your car insurance rate.”

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Do I Need to Tell my Insurer About My DUI?

Most states do not have laws mandating that individuals must tell their auto insurance companies about a DUI conviction. However, it is a good idea to let your auto insurance company know as soon as possible when you have been convicted of a DUI.

The DMV will not notify your insurer, but when your insurer is selling and or renewing a policy, they will do a background check on your driving record and will find out if you have a DUI. Being honest about your DUI upfront will aid in future discussions about your car insurance. When you receive a DUI, your insurer will most likely suggest looking for high-risk coverage. This form of coverage is specifically for drivers with poor driving records or convictions that are high-risk for the insurer to cover. 

Since the insurance companies have access to your driving record, the date they find out about your DUI will be dependent on when they check your driving record through their systems. 

Inevitably, the insurer will find out, so it is best not to keep it a secret from them when getting a DUI charge. 

Do Insurance Rates Ever Reduce after a DUI?

Your driving record is used by auto insurance companies to adjust your car insurance rates. When you get a DUI, it goes onto your driving record, and as such, the rates become dependent on how long the offense remains on your driving record. Different insurance companies and states have differing levels of insurance rate increases as a result of a DUI.

Once the DUI is off your driving record your auto insurance rates are likely to decrease. Each state has different regulations for the length that the DUI remains on your driving record. Generally, DUIs can stay on your record for 5 to 15 years.

A quick note is that your driving record and your criminal record are two separate documents, so having your DUI off your driving record does not necessarily mean it will be off your criminal record. 

If you are interested in insurance rates after a DUI charge, you can read more about the top-rated auto insurance coverage providers here.

Liability Insurance

Standard liability insurance will cover damages and injuries for both you and the other person(s) involved in the accident. However, some states have permitted car insurance companies to exclude DUI-related damages from their liability insurance. The issue here is that with auto insurance, the company covers unintentional accidents. With a DUI, a car insurance company may reject a claim on the basis that the DUI was intentional, as the driver put themselves in harm’s way knowingly behind the wheel. In a circumstance where the insurer will not cover the DUI claim, then legal action may be needed.

In the case that standard auto liability coverage will not cover the DUI, then you may want to look into SR-22/FR-44 Insurance. 

What is SR-22/FR-44 Insurance?

If you have received a conviction related to dangerous driving, then when it is time to have your insurance renewed, you may need to prove to your insurance car company that you are a safe driver that they can trust to insure. This proof comes in the form of an SR-22 document. ‘SR’ in SR-22 stands for Safe and Responsible since the document is proof to the company that you are a safe driver. However, there are steps you need to take to get this form because not everyone is able to get one. The 

An SR-22 is a document that is ordered by the court. These documents are not limited to DUI and DWI convictions and can be used for other reasons such as multiple speeding tickets, uninsured drivers, multiple violations, etc. 

USAA Insurance explains that an SR-22 is “a special form that your auto insurance company sends to your state’s motor vehicle department. It certifies that you meet the state’s minimum requirements for liability coverage.”

Other names for SR-22 are:

  • SR-22 Bond

  • SR-22 Certificate

  • Financial Responsibility Filing

  • Statement or Certificate of Financial Responsibility

Many car insurance companies refer to this document as SR-22 insurance. However, this is not a specific type of insurance. For the sake of ease, it is referred to as insurance, but what this document does is allow your insurer to give you liability coverage after you have committed dangerous driving activities, such as a DUI or DWI.

An FR-44 is similar to an SR-22. It is also a document that proves your safety as a driver on the roads, but as Geico Insurance explains, “it proves that a driver is carrying active liability insurance that meets or exceeds state minimum coverage requirements.* However, an FR-44 typically includes higher liability requirements than state minimums or SR-22 minimum coverages.”

  • The FR-44 is only used in Florida and Virginia.

  • The minimum liability limits on an FR-44 are usually much higher than that of SR-22 and can be double the amount.

When you sign up for insurance, the insurer will usually ask you if you would like to request an SR-22, or if you’re in Virginia/Florida an FR-44. The car insurance company takes care of the process and will add it to the policy. 

You will need to check with your auto insurer to see if they offer SR-22s. Most car insurance companies will have a flat fee for requesting an SR-22/FR-44. There is also usually a one-time filing fee. You can ask your provider for a quote if they cover SR-22 documents. The SR-22/FR-44 documents remain valid for the duration of the policy. As long as the policy is active, then the documents also remain active. 

Since there are no car companies that offer DUI Insurance, an SR-22/FR44s is important for your car insurance company to allow you to have liability coverage, when convicted of a DUI, you will want to let your insurance car company know about it and ask if they are able to request an SR-22 to prove that you are a safe driver and can be ensured on the road. 

Overview

A DUI and DWI will increase your insurance rate by a significant amount, and to lower that amount will depend on your future driving record and when the conviction is off your driving record. Once you are convicted, tell your insurer as soon as possible so they can sort out the rates and fees associated with your plan.

Your insurance company will do a background check on your driving record when they want to renew your policy or sell you another policy. They have access to these records and can find out if you have received a DUI or DWI. The faster you tell them, the smoother it will be between you and your insurer. One of the factors of a DUI increased car insurance rates is the time in which it happened. If the insurer finds out that it has been a long time since you have reported the DUI then they may increase your policy even further.

Although A DUI and DWI conviction will matter to your insurer, taking these steps will aid in the overall process of continuing with your car insurance. 

There is no ‘DUI Insurance’ that car companies provide, so the DMV may ask you to file an SR-22/FR-44 document with your insurance company. This document acts as proof that you are safe to drive on the road and can receive the minimum liability insurance coverage

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