Not that long ago (around 10 years) it was easy enough to calculate auto premium by using blank sheet of paper and a pencil. Nowadays without computers in most cases this process is simply impossible. The list of items which affect our automobile insurance is very long and it contains:

• age
• gender
• marital status
• geography
• vehicle
• occupation
• distance to work
• driving experience
• use of a vehicle (whether to work or for business purposes)
• whether or not you currently have auto insurance
• previous insurance limits
• theft protection devices (often results in discounts)
• multiple cars and drivers (another opportunity for discounts)
• our credit
• driving record
• number of claims reported to insurance companies

Because each insurance company has a different (complex) rating algorithm there is no set dollar amount or rating point comparison that can be given – which means that the cost will vary.
You may have wondered why there’s such a premium difference between companies, some are higher and others lower – well the answer is rather simple – it depend on a way in which the premium is calculated, and also on statistic data on which insurance companies base they’re evaluations. If given insurance company analyzes all theirs data and comes to a conclusion that … from all of its customers, single women between ages 30 - 40 living in Chicago cause more accidents then women before age 30 or after 40, it is possible that our premium will be higher.
Please remember that it is only a simple assessment, and that there are many more items which affect our premium.

Each of the driving violation – such as speeding, disregarding a traffic control light, parking tickets, at-fault accidents, or driving under the influence is assigned a certain point value. If you are found guilty of one of these infractions, the appropriate number of points is added to your driving record. The more points you have, the worse your record. Each insurance company has its own method of evaluating applicants, so the points on your driving record may or may not have a direct impact on the rates you pay for auto insurance. Although, if you receive a ticket for improper turn it can be very influential on you premium in one company but in another it will have no meaning as long as it is only one ticket on your record.
Statistically speaking one of the most severe violations is driving on a suspended driving license and it could increase your insurance premium over as much as 26%. Remember though, that most will decrease within time frame.

We often ask ourselves three most important questions regarding our driving record:

1.   How long will a driving violation stay on our record?
Secretary of State indicates, that speeding tickets, disregarding a traffic light or a stop sign, improper lane usage, etc. remain on a driver’s record for four to five years from the date of conviction (always two dates are shown on the record: when did the violation occur and when we were found guilty). If the ticket forms the basis for a suspension or revocation, the information will be carried on your record for a minimum of seven years from the date of reinstatement. Alcohol/drug offenses remain on a driver’s record for a lifetime.

Interesting as it may seem, received ticket in Ontario, Canada might be reported back to the Illinois Secretary of State, therefore appear on our driving record. It is because province of Ontario has reciprocal agreement with over 40 states, including Illinois.

2.   What will be the increase in premium if we get a ticket during policy period?
Many of us wonder why insurance company increases premium based on a ticket which was given nearly 6 months prior to renewal, on our second continuation. Well – so many different companies, so many different ways to calculate premium. Generally speaking, insurance companies may check your diving record in following times:

•  when you initially apply for coverage
• when you request a change to your policy (increased coverage amount, etc.)
• when your add a vehicle or a driver to your policy
• when your policy comes up for renewal

In the last example, it happens that your diving record is check on the second renewal which is once a year – therefore a ticket might not be considered during first renewal.

3.   Why do insurance companies wait three years before decreasing our insurance cost?
More and more of the insurance companies consider driving record for the past three years that is because from the statistical point of view all information gathered for such a period of time, has more accurate reflection on your record and can help to more precisely evaluate risk.

It is amazing of how many records emerge about us each day and in what way and an impressive time frame thanks to today’s technology gets spread out to all institutions.
Checking of a driving record or other records in connection with accidents and automobiles nowadays happens, automatically.