Wednesday, January 25, 2006

Speeding tickets and insurance

People often ask me how their speeding ticket will affect their insurance rates. There is actually a specific provision of the law, Insurance Law § 2335, that addresses one portion of that question, and I've pasted the text at the bottom of this post.

Other parts of the law allow for insurance companies to establish what's called a "merit rating plan". Each company has their own plan, and it's awfully hard to find out the details of the plan. I would think I'm pretty sophisticated (having worked for an insurance company), but I haven't been able to figure it out with my policy.

§ 2335 prohibits them from raising your rates for traffic infractions, unless blah blah blah. If you read the text, it reads like that and you'll scratch your head for a while trying to figure it out. I think I understand it, but who knows.

Getting to the details, essentially I read it as saying that:
They can't raise your rates for getting a traffic ticket, unless
1. The relevant violation(s) occurred within 3 years before the date 4 months before your policy period starts.
-- If I read that right, you can get any ticket less than 4 months before your policy period starts, and they can't raise your rates until the next year.
-- Note that it's the date of the violation, not of the conviction, that matters. I think. It says "apply to a conviction for a violation that occurred ...". Presumably that means it's when the violation occurred, not when the conviction occurred. So the longer you stall your ticket, the less impact it will have on your insurance?

2. (1) says a speeding ticket for 15 or less over the limit (i.e. 70 in a 55; 80 in a 65) cannot affect your insurance.

-- What if you get two speeding tickets of 15 or less? As I read this, it still shouldn't affect your rates.

3. After a long list of other items, (14) says "two or more moving violations of any other provision ..."

-- Well, speeding is not an "other" provision. It's one of the provisions in the list, so two speeding tickets of 15 or less shouldn't affect your rates.

4. What if you get one other moving violation (the typical reduction is an 1110(a) - failure to obey a traffic control device - a 2-pointer), and you get a speed of 15 or less?

-- As I read this, it still should not affect your rates. You've got one "other" moving violation (the 1110(a)), and one speed, which is not an "other".

So if you're a speeding ticket lawyer, and you have the opportunity to plead your client down from a 6-point speed to an 1110(a), should you do so, or should you go for a 3-point speed?

-- By the logic above, if you want to protect your client's rates, you should ask for the 3-point speed.

Now reality sets in. First, the insurance companies may not follow the law. If they don't, it's going to cost your client a lot more to challenge the insurance company in Court. You can complain to the Insurance Department, but will they even understand the issue?

And of course your client will probably think that getting 2 points is better than 3. How do you address this situation? Ideally you discuss it with your client.

Above I mentioned that 2 speeding tickets should not affect rates (if they follow the law). But remember that a speed might be either 3 or 4 points. Let's take the 3-pointer (which is for speeds of 1-10 mph over the limit). The 2 tickets add up to six points. That means DMV will hit your client with the new Drivers Responsibility Assessment, costing an additional $300. Or if you get two 4-pointers, the fines are higher (max $355 each, up from about $200 for the 3-pointer), and now the assessment is $450.

Also keep in mind that 3 speeds in 18 months means you lose your license. So yes, you can get three 3-point speeds and only have 9 points, and theoretically your rates won't go up, but your license will be suspended or revoked.

The statute itself is below.
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Insurance Law § 2335 -- Motor vehicle liability insurance rates -- prohibition of surcharges for certain traffic infractions


No insurer authorized to transact or transacting business in this state, or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting business in this state, which sells a policy providing motor vehicle liability insurance coverage in this state shall increase the policy premium in connection with the insurance permitted or required by this chapter solely because the insured or any other person who customarily operates an automobile covered by the policy:


(a) has been found guilty of a traffic infraction under any of the provisions of the vehicle and traffic law provided, however, that this provision shall not apply to a conviction for a violation which occurred during the thirty-six month period ending on the last day of the fourth month preceding the month of the effective date of the policy if such conviction consisted of:

(1) operating a motor vehicle at a speed of more than fifteen miles per hour in excess of the legal limit;

(2) operating a motor vehicle in excess of the speed limit, or in a reckless manner, where injury or death results therefrom;

(3) operating a motor vehicle in excess of the speed limit, or reckless driving, or any combination thereof, on three or more occasions;

(4) operating a motor vehicle while intoxicated or impaired by the consumption of alcohol;

(5) operating a motor vehicle while impaired by the use of a drug, within the meaning of section one thousand one hundred ninety-two of the vehicle and traffic law;

(6) homicide or assault arising out of the use or operation of a motor vehicle, or criminal negligence in the use or operation of a motor vehicle resulting in the injury or death of another person, or use or operation of a motor vehicle directly or indirectly in the commission of a felony;

(7) operating a motor vehicle while seeking to avoid apprehension or arrest by a law enforcement officer;

(8) filing or attempting to file a false or fraudulent automobile insurance claim, or knowingly aiding or abetting in the filing or attempted filing of any such claim;

(9) leaving the scene of an incident without reporting;

(10) filing a false document with the department of motor vehicles, or using a license or registration obtained by filing a false document with the department of motor vehicles;

(11) operating a motor vehicle in a race or speed test;

(12) knowingly permitting or authorizing an unlicensed driver to operate a motor vehicle insured under the policy;

(13) operating a motor vehicle insured under the policy without a valid license or registration in effect, except when the person convicted had possessed a valid license or registration which had expired and was subsequently renewed, or during a period of revocation or suspension thereof, or in violation of the limitations applicable to a license issued pursuant to article twenty-one or article twenty-one-a of the vehicle and traffic law; or

(14) two or more moving violations of any other provision of the vehicle and traffic law;

(b) has had a temporary suspension of a driver's license pending a hearing, prosecution or investigation or an indefinite suspension of a driver's license which is issued because of the failure of the person suspended to perform an act, which suspension will be terminated by the performance of the act by the person suspended, or has had more than one such temporary or indefinite suspension arising out of the same incident issued against him or her, provided that the foregoing provisions of this section shall not apply if such suspension or suspensions has or have not been terminated on or before the effective date of the policy; or

(c) with respect to a non-commercial private passenger automobile insurance policy, has had an accident while operating a commercial vehicle in the course of employment and in the discharge of the employee's duties at the time of the accident, unless the accident is determined to have been caused by the intentional action or gross negligence of the insured.
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