Insurance Points: Yet Another Cost of Traffic Convictions

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Jeff wrote last week about the court costs associated with traffic infractions, which are significant, even for minor traffic offenses.

As he mentioned, these costs are not the only financial burden imposed upon drivers found responsible for traffic infractions or convicted of traffic offenses.  Drivers who seek representation in such proceedings also incur attorney’s fees.  Another potentially significant cost, and one in the forefront of most motorists’ minds, is the increase in insurance rates that can result from traffic convictions.

Automobile insurance policies for North Carolina drivers are governed by the Safe Driver Incentive Plan, or SDIP, established pursuant to G.S. 58-36-65.  The SDIP distinguishes among classes of drivers that have a record of at-fault accidents, a record of convictions of major moving traffic violations, a record of convictions of minor moving traffic violations, or a combination thereof, and provides for premium differentials among those classes of drivers.  Insurers learn of traffic convictions—a term I’ll use throughout this post to refer to both convictions of misdemeanor and felony offenses and adjudications of responsibility for infractions—by obtaining records from DMV. See G.S. 58-36-65(e) (providing that “[r]ecords of convictions for moving traffic violations to be considered under this section shall be obtained at least annually from [DMV]”); see also G.S. 20-4.24(a) (requiring a state that is a member of the Drivers License Compact to report to another member state a conviction for any offense that the member states agree to report”).

The North Carolina Department of Insurance (DOI) publishes this nifty guide to the SDIP, setting forth the insurance points assigned to each type of conviction for a traffic violation and the corresponding rate of increase for those convictions and adjudications. Insurance points are different from driver’s license points assigned by the North Carolina Division of Motor Vehicles (DMV) pursuant to G.S. 20-16. Driver’s license points matter because DMV may revoke the driver’s license of a person who accumulates 12 or more license points within three years. G.S. 20-16.5(e). Insurance points matter because of rate increases. A single insurance point, which can result from conviction of a minor moving violation, results in a thirty percent rate increase.

DOI’s guide also describes the SDIP exceptions to rate increases. No insurance points are charged for a single prayer for judgment entered per household every three years. And no insurance points are assessed for conviction of speeding 10 mph or less over the posted speed limit so long as the violation did not occur in a school zone and the person has not been convicted of another moving traffic violation within the three-year experience period.

The easiest way to avoid the assessment of insurance points is, of course, not to commit any traffic violations or cause any accidents. But even drivers who occasionally run afoul of the state’s traffic laws can avoid insurance consequences. Such drivers can seek a prayer for judgment continued or plead guilty to or responsible for an offense that does not result in the assessment of insurance points either due to an explicit statutory exemption or because the offense is not considered a moving traffic violation.

For example, no driver’s license or insurance points may be assessed upon conviction of a speedometer violation under G.S. 20-123.2, which is statutorily denominated “a lesser included offense of speeding,” even though such violations must be recorded in the driver’s official DMV record.  See G.S. 20-141(o). Similarly, no insurance points may be assessed for conviction of an improper muffler or several other offenses listed in G.S. 20-16(c). Nor may insurance points be assessed upon conviction of failure to light headlamps while windshield wipers are in use. See G.S. 20-129(a)(4).

Other statutory provisions prohibiting the operation of vehicles without proper equipment are silent with respect to whether insurance points apply. See, e.g., G.S. 20-122.1(a) (requiring every motor vehicle subject to a safety equipment inspection that is operated on a highway be equipped with safe tires and making no mention of driver’s license or insurance points); G.S. 20-24(a)(requiring that every motor vehicle operated on a highway be equipped with adequate brakes and making no mention of driver’s license or insurance points).  While there is an argument to be made that such violations could properly be considered moving violations since operation of a motor vehicle is an element of the offense, DMV does not consider equipment violations to be moving violations for driver’s license point purposes.  My guess is that insurers interpret the SDIP accordingly and assess insurance points only for offenses deemed moving violations by DMV.  Notwithstanding the lack of points, conviction of an improper equipment offense carries its own enhanced cost.  An additional $50 in court costs is assessed upon conviction of any improper equipment offense.  See G.S. 7A-304(a)(4b). This fee is remitted to the Statewide Misdemeanant Confinement Program, “to provide for contractual services to reduce county jail populations.” Thus, the court costs for a person convicted of an improper speedometer offense is not the $188 Jeff referenced in his earlier post; instead, the court costs total $238.

4 comments on “Insurance Points: Yet Another Cost of Traffic Convictions

  1. Regarding the $50 fee or assessment related to improper equipment pleas, have you heard of any litigation regarding this statute or cost? We have a local judge that consideres this a fine and always “waives” the $50m assessment and orders a $50 fine instead. I assume this makes a difference as to where the money actually goes.

  2. The clear proceeds of all fines collected for the violation of criminal laws are appropriated to school boards pursuant to Article IX, Section 7 of the North Carolina Constitution. Thus, if the $50 in costs were deemed a fine rather than a court cost, its proceeds would fund public schools rather than the Misdemeanant Confinement program. I have heard rumblings of some litigation over this issue, but do not know any specifics about pending lawsuits. If another reader does, perhaps he or she could send in a comment.

  3. When was the last time that the Insurance Point Rate Schedule was revised? The current scale for property damage is 1 point or property damage less than $1,800, 2 points for $1,800-$3,000, and 3 points for accidents with property damage in excess of $3,000.00. These seem very low threshold given the high cost of automotive repair and body work. I think the NCDOI needs to take a look at increasing the dollar amounts of property damage in relation to the points assessed.

  4. […] it does for records of violations of the State’s motor vehicle laws.  As a result, no license or insurance points are assessed for local ordinance violations. And when the ordinance violation is not punished as an […]

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