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What are penalty points and how do they affect insurance?

By Joy Persaud

Penalty points are endorsements issued for a variety of driving offences. They will stay on your licence for a period of time – depending on the reason you’ve received them.

Any number of penalty points will affect your insurance premiums, and if you rack up 12 points, you could lose your driving licence. The Association of British Insurers (ABI) has found that people with penalty points report a higher number of driving incidents and are more likely to make a claim than more careful road users. Understandably, serious driving offences attract higher insurance premiums.

Martin Smith, Aviva technical claims adviser, says, “Your driving history can have a significant impact on the cost of insurance. It is an insight into the behaviour patterns of a driver and the potential – the risk – that they may be involved in a claim event.

“The higher the risk, the greater the premium. Part of your [insurance] history will [include] convictions for motoring offences and penalty points collected on your licence.”

Higher penalties

Unsurprisingly, drug and drink-related offences, or those that involve the driver causing injury or death while driving, will stay on your driving record for 11 years.

And, in 2017, new fines for speeding came into force to reflect the severity of the offence. On April 24, 2017, a Band C speeding fine was introduced. Drivers speeding at 51mph – or faster – in a 30mph area now face a fine of 150% of their weekly income plus six penalty points on their licence. Disqualification is also possible – and any ban of more than 56 days means you’ll need to apply for a new licence from scratch.

Glenn Edwards, Aviva UK personal lines motor underwriting manager, says:“We allocate motoring convictions a category based on our perception of their degree of severity, so a speeding (SP) conviction will not be viewed as harshly as a Drink or Drug (DR or DG) conviction. Beyond that, a conviction that occurred three months ago will attract a higher rating than one that occurred two-and-a-half years ago.”

As well as penalties for speeding, you can be issued with six penalty points plus a £200 fine for using a handheld phone when driving. Drivers who have passed their test in the last two years will lose their licence if they are caught using a handheld phone while driving.

New drivers

If you are a new driver, your licence will be revoked if you receive six or more penalty points within two years of passing your test. In this case, you must apply and pay for a new provisional driving licence and you will have to take the theory and practical driving tests again, once your ban is up.Any penalty points on a provisional licence that haven’t expired will be carried over to your full licence when you pass your test .

Drivers whose licence is revoked after they have passed their test but before they have sent off for their full driving licence will need to retake their theory and practical tests, with their current provisional licence.

Penalty points and insurance

If you are unsure about how many points you have, you can check via gov.uk to see your driving record, review your penalty points or disqualifications and create a licence ‘check code’ so you can share your driving record with an organisation such as a car hire company.

If you have points on your licence, you are legally obliged to tell your existing insurer and you must declare it when shopping around for a new policy. If you try to hide the information, your policy may be declared void – and you may find you are given yet more penalty points,and possibly prosecuted for driving an uninsured vehicle.

Martin says: “Motor insurers require that customers make an honest presentation of such factors both when first taking out the policy and at any subsequent change or renewal.

“To lie or attempt to hide your history is deemed misrepresentation and could cause problems in the event you make a claim. You may not be covered for your loss, or worse, be deemed uninsured. Always disclose honestly and fully to your insurer.”

The ABI says it is unlikely that attending a speed awareness course will have a major impact on your car insurance premium. You will only be able to attend one of these courses if you are within 11mph of the speed limit.

It recommends drivers in this category check their premium with their insurer, as each has its own criteria: “A speed awareness course is not a driving conviction, and so if asked by your insurer if you have any previous driving convictions you will be able to answer ‘no’.

“However, if an insurer asks you specifically about attending a speed awareness course, you will need to answer truthfully.”

What to do if you accrue points

In terms of your premium, paying a higher voluntary excess in addition to the compulsory amount may reduce your overall premium. Also, installing a black box telematics recorder that measures how the car is being driven can also save you money by proving you are a safer and conscientious driver.

It goes without saying that the best course of action to avoid building up points – and paying the price – is to drive carefully, to abide by the law and to be upfront about any driving misdemeanours with your insurance company to avoid problems from potentially escalating.

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