How a Los Angeles DUI Can Mess Up Your Insurance Rates [And What to Do About It]
In California, penalties for a first time DUI can take a big chunk out of a bank account—at least $1,800 in penalties and fines, plus the cost of attending DUI driving school (if required), and the expense of installing an ignition interlock system, which courts can now require for even first-time offenders.
But there’s another expense that some drivers convicted of DUI don’t immediately consider—the huge rise that they’re likely to see in their auto insurance premium rates. According to the financial website nerdwallet.com, average good drivers in California can expect their insurance premiums to more than double if they are convicted of DUI. The nerdwallet research revealed that a 25-year old with a DUI would pay about $1,300, while one with a DUI on record would pay about $4,000. A 50-year-old who normally paid about $1,060 could expect to pay $3,275 after a DUI conviction.
The extra cost of auto insurance as a result of a DUI will depend upon:
• An individual’s age when the DUI occurred (younger people normally pay more for auto insurance than older adults anyway);
• How long it’s been since the DUI conviction;
• The number of DUI convictions the individual has on his/her driving record;
• The insurance company itself. (Some are less inclined to handle higher-risk drivers, and they price their policies accordingly.)
Another financial information site, valuepenguin.com, obtained quotes from three insurers to evaluate the effect a DUI conviction would have on their rates. State Farm premiums increased more than 31 percent; Allstate premiums went up almost 34 percent; and Nationwide rates jumped 47 percent. Some insurers throw drivers with a DUI conviction into a high-risk insurance pool (with their attendant rate increases); some may cancel a driver’s insurance altogether.
A DUI conviction is likely to adversely affect your insurance rates for a minimum of three years, but the impact could linger for much longer in California, where such violations remain on your driving record for a decade.
After a DUI conviction in California, a motorist that wants to get back his/her suspended or revoked driver’s license from the state must also obtain an SR-22 financial responsibility form. This is a certificate from an insurance company that attests the driver has at least the minimum auto liability coverage required under state law. Drivers may have to pay several hundred dollars to the insurer to obtain an SR-22 as well as additional fees the insurer charges to file the certificate with the California DMV. Asking an insurer for an SR-22 also ensures that the company will learn about the DUI conviction and raise rates accordingly.
Why Insurers Raise Rates After A DUI
Insurance companies, which are in the business to make money, live by statistics. They need to take in more money in premiums than they pay out in claims, so they prefer to take on as customers the drivers who show the least risk of getting into accidents.
Unfortunately for drivers with a DUI conviction, the numbers prove that they are not a good insurance risk. (Data taken from the NHTSA Traffic Safety Facts 2014.)
• 31 percent of fatal motor vehicle traffic crashes involved drivers with a blood alcohol content of .08 or higher.
• The estimated economic cost of alcohol-impaired driving crashes in the U.S. in 2010 (the last year for which data is available) is $44 billion. Some of the costs in that figure include expenses for which an insurance company could be on the hook: legal and court costs, medical costs, emergency medical services, insurance administration and property damage.
The NTHSA report also noted that “In cases of serious injury or death, such costs fail to capture the relatively intangible value of lost quality-of-life that results from these injuries. When quality-of-life valuations are considered, the total value of societal harm from motor vehicle traffic crashes in the United States in 2010 was an estimated $836 billion, of which $201.1 billion resulted from alcohol-impaired-driving crashes.”
Insurers are also aware that drivers convicted of driving under the influence probably did it before they were arrested. According to the National Insurance Information Institute, “studies found that on average, one arrest is made for every 88 instances of driving over the legal limit defining drunk driving… In one study, over 80 percent of first offenders were found to be problem drinkers or alcoholics; only 18 percent were considered social drinkers. Other studies have shown that 70 to 80 percent of DWI offenders have alcohol abuse problems.”
Reducing Costs Of Auto Insurance After A DUI
Shopping around for auto insurance rates is always a good idea, but comparing costs becomes even more critical after a driver has a DUI conviction on their record. Unfortunately, many insurers won’t touch a new applicant with a DUI, so drivers may want to seek other ways to reduce their soaring premiums.
Drivers can use other strategies to reduce the cost of their auto insurance after a DUI.
• Take a defensive driving course. (Check with the insurer or agent to see which courses qualify you for a discount, and if that discount applies in cases of DUI.)
• Keep a clean driving record; avoid behind-the-wheel behaviors that could result in speeding tickets or citations for moving violations.
• Avoid accidents. Drivers without accidents for three years usually get some discounts on their insurance.
• Look for other discounts that a company offers. While DUI drivers won’t qualify for the good driver reduction, they may be eligible for a break on their premiums if they use the same insurer for both their home and their auto insurance. If they drive a limited number of miles per year, they may be able to get a low mileage discount.
• Trade down. Insurance companies will charge higher premiums for a high-powered sports car than they will for a serviceable sedan. (Before you make any decision, check with the insurer to see how much the savings would be.)
• Reduce collision coverage on older vehicles. You can check Blue Book values of your vehicle to determine how much you’d be likely to receive from the insurer if someone demolished it in an accident.
• Check with the insurer to determine how much money raising the deductibles on an insurance policy would reduce its cost. This strategy is more likely to pay off for younger drivers in a higher risk category than it is for older drivers.
The Best Strategy—Avoiding A DUI Conviction
Considering all of the costs that drivers are likely to face when a court convicts them of DUI, the smart choice is to avoid getting into a situation where you put yourself at risk of a DUI charge.
• Refrain from drinking if you know you’re going to be driving home, or have a designated driver who will ensure that you (and anyone else drinking) get home safely.
• Know your limits. There are plenty of charts available (and now even some mobile apps) that can help you gauge if you’ve had too much to drink to drive legally.
• If you’re wondering whether or not you should drive after drinking, err on the safe side. Call a friend, get a ride with Uber, take a taxi. A minimal expense up front can save you tens of thousands of dollars in the long run.
• If police do arrest you for DUI, contact an attorney experienced in DUI law immediately. Law enforcement officials can frequently make mistakes that violate your rights and that would invalidate evidence that could help convict you of a DUI. You’re entitled to constitutional protections under the law; don’t be afraid (or ashamed) to take advantage of them.