So one of our most common questions, is how ticket/accident will affect your rate. Below is the stipulations set forth by the state of NC. They're not all inclusive nor do they apply specifically to any carrier, because carriers will charge different insurance points based on the violation itself. But it's a great rule of thumb!
Traffic and Insurance Points
Whenever a North Carolina motorist receives a traffic ticket in North Carolina they can be assessed two different types of points, driver's license and insurance points.
Driver's License Points
The North Carolina Division of Motor Vehicles maintains a record of convictions and automobile accidents (for those in which the police are called) for every person licensed or required to be licensed.
The NC DMV will assign points for convictions of North Carolina's Motor Vehicle Laws in accordance with the schedule below. If you accumulate 12 or more points within a three-year period, the NC DMV may suspend your license. The first suspension of your driver's license under the point system shall be for no more then 60 days. The second suspension shall not exceed 6 months and any subsequent suspension shall not exceed one year. If you are in danger of losing your license because you have accumulated too many driver's license points, the NC DMV may allow you to attend the Driver Improvement Clinic and have three points removed from your record. This, however, does not remove the points from your insurance. You can only take this Driver Improvement Course once every 5 years.
Once your license has been suspended, you can face a second suspension of your license if you accumulate 8 or more points during the three-year time period immediately following the reinstatement of your license. If you are convicted of two or more traffic offenses which were committed on a single occasion, then you will only be assessed driver's license points for the offense having the greater point value.
20-16. Authority of Division to suspend licenseThis link will open in a new window
This link will open in a new window03-04-2005
Schedule of Driver's License Points
If you have an out of state license and commit an offense which is suspendible or revocable in North Carolina, the NC DMV cannot suspend you driver's license but can suspend or revoke your privilege to drive in North Carolina. They will also notify your licensee state which may take additional action.
If you receive a notice from the NC DMV concerning suspending or revoking your driving privilege in North Carolina, you are entitled to a hearing if you follow the guidelines and procedures set out in the notice. Some offenses are suspendible without an opportunity for a DMV hearing. If that is the case, there is the possibility of obtaining a limited driving privilege through the court system.
The automobile liability insurance rates which are paid by licensed drivers in North Carolina are determined by five factors:
One - 25%
Two - 45%
Three - 65%
Four - 90%
Five - 120%
Six - 150%
Seven - 180%
Eight - 220%
Nine - 260%
Ten - 300%
Eleven - 350%
Twelve - 400%
For 1 point accidents ($1800.00 or less) there is no surcharge assessed if: 03-04-2005
The Reinsurance Facility
After points, the second major factor affecting the cost of liability insurance is whether a motor vehicle owner has been transferred (through a process known as "ceding") to the North Carolina Motor Vehicle Reinsurance Facility. The Reinsurance Facility is a nonprofit legal entity consisting of all insurers engaged in writing motor vehicle insurance in North Carolina. Its purpose is to provide liability insurance for drivers or vehicle owners whom companies do not wish to insure as part of their regular voluntary business. In brief, it is a method of transferring the risk of loss from the individual insurance company to all insurance companies.
North Carolina law makes no provision regarding which individuals are to be ceded to the Reinsurance Facility. The decision belongs entirely to each particular insurance company. If an applicant for motor vehicle liability insurance is, for any reason, considered an undesirable risk by the company, it may cede the applicant to the Reinsurance Facility even though the person has a clean driving record. In other words, it is possible for a person who has never received a traffic citation or had an accident to be ceded to the Reinsurance Facility. Obviously, those with bad driving records are prime candidates, but a company may transfer anyone it considers a bad risk for any reason. Reportedly young drivers, the elderly, and some occupational groups often fall within this category. There is no appeal process, but applicants may seek coverage with another company that would not cede them to the Reinsurance Facility.
Because the Reinsurance Facility has many high-risk drivers, the SDIP provides that it may charge a higher base rate than is allowed in the voluntary market. But insureds ceded to the Reinsurance Facility who are clean risks--meaning, for this purpose, that no one on the policy has any points and no driver on the policy has less than two years' driving experience--pay the same as other policy holders with clean driving records who have not been ceded. However, a driver in the Reinsurance Facility who had insurance points were more than 50 percent higher. And those drivers pay the surcharge for their points on top of that higher rate.
Table 3 shows the base cost for insurance before any surcharge for points is added when the insurance is handled as regular business (that is, not ceded to the Reinsurance Facility). Table 4 shows the comparable base cost for an owner with points whose policy has been ceded to the Reinsurance Facility.
The third factor determining a person's automobile liability insurance costs is where the person lives in North Carolina. The state is divided into nineteen territories, each with its own base rate. The cost of insurance varies considerably from territory to territory. For example, the base cost for $100,000/$300,000 bodily injury coverage for a motor vehicle owner with no points is $170 in Asheville (Territory 11), while the identical coverage in Charlotte (Territory 52) is $311. For a vehicle owner whose policy has been ceded to the Reinsurance Facility (and who has even one point, therefore paying the higher Reinsurance Facility base rate), the cost for the same coverage would be $252 in Asheville and $521 in Charlotte (plus, in each case, the surcharge for the points). Table 5 lists the areas covered in the nineteen territories.
Age and Sex
A fourth factor that can raise an insured's liability insurance cost is inexperience as a driver, which usually correlates closely with age.
The 1975 Session of the North Carolina General Assembly enacted legislation intended to prohibit insurance rates from being based on the ages or sex of the insured. Specifically, G.S. 58-3-25 provides: "No insurer shall . . . base any standard or rating plan for private passenger automobiles or motorcycles, in whole or in part, directly or indirectly, upon the age or sex of the persons insured." But the youngest drivers typically pay higher insurance rates (or have their parents pay the higher rates for them), because the surcharge is added to policies that cover drivers who have fewer than three years' driving experience as a licensed driver. (The surcharge is not added when a member of the household begins driving under a learner's permit; and time spent driving on a learner's permit does not count toward the three years). For most drivers, the surcharge is applied from age sixteen to nineteen, causing its impact to be felt most by young people and those who pay the insurance for young people, but the same rule would be applicable to a fifty year old if that person had no previous driving experience. This Surcharge approximately doubles the cost of liability insurance on the car the inexperienced driver "principally operates".
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