Car insurance is kind of a funny thing. The protection it provides isn’t something you want to be without and yet it’s not something you want to have to use. And if you are unfortunate enough to suffer a loss requiring you to make a car insurance claim, you may be worried that your insurance cost will go up. The fact is, you may very well see an increase in your premium costs at renewal time, with certain exceptions.

Auto Insurance and DMV Points

Auto insurance insurers in North Carolina may add insurance points to your policy every time you’re involved in an at-fault accident or receive a moving violation. This may prompt your insurer to add extra charges to your policy cost, known as a surcharge. These points remain on your policy for three years, accumulating, and generating additional charges added on to your policy costs. The purpose of this process is an attempt to penalize drivers the insurer views as a higher risk so that they may reward safe drivers with more reasonable costs.

Insurance points are different and separate from DMV points. DMV points are given every time you’re found to be at fault in an auto accident or receive a moving traffic violation. These points accrue on your driver’s license for violations as shown here and accumulating a certain number of points can cause the state to suspend or revoke your driving license for a set amount of time.

Insurance points are assigned to your auto insurance policy for the same types of infractions as DMV points, but rather than affecting the suspension or revocation of your driver’s license, these points affect the cost of your insurance coverage. An accumulation of points may cause your insurer to raise your rates because you’ll no longer be seen as a safe driver compared to a policyholder with no points. Be aware, however, these increased rates will only take place at renewal time and not in the middle of your policy cycle.

No-fault Accidents

Unfortunately, accidents for which you’re found to be not at fault can still negatively affect your car insurance rates. In the eyes of your insurer, having an accident (even a no-fault one) increases the risk that you may have another. It may seem unfair to be penalized for something over which you have no control, but even a no-fault accident can cost insurers claim dollars.