How a DWI
conviction affects your insurance
Many insurance companies check your motor vehicle record
only once every three years or when you're applying for a new policy. Sometimes,
accidents, tickets, and drunk-driving convictions can escape your insurer's
attention or don't end up on your motor vehicle record. However, if your insurer
does find out about a driving while intoxicated (DWI) conviction, you're likely
to feel the pinch of higher rates and possibly policy cancellation or nonrenewal.
There are two ways insurance companies generally deal with
customers convicted of DWI. First, your insurer will likely raise your insurance
premiums and label you a high-risk driver if it finds out you've been convicted
of DWI. In this case, you'll likely have to file proof of insurance for three
- sometimes five - years with your state's department of motor vehicles.
Your insurance company will have to provide the DMV with an SR-22 form, which
removes your license suspension by providing the state with proof of insurance.
An SR-22 also means your insurance company is required to notify the
DMV if it cancels your insurance for any reason.
Most state laws require DWI convicts to get an SR-22 from
their insurers, so you can't hide. In addition, your company may cancel your
insurance mid-term or terminate the policy at the end of the term because of
your DWI conviction, especially if you are currently in a preferred class. Your
company will send you a notice stating why you've been canceled, and then you'll
have to find another insurer while having a cancellation on your claims history.
Some insurance companies don't offer SR-22 policies, so
you may also be nonrenewed or canceled because your company can no longer
provide what you need.
Certain states don't allow insurance companies to
drop you in the middle of the policy term even for a DWI, so make sure you know
the laws in your state.
miss DWI convictions
It's possible that your insurance
company will never find out about your conviction if you don't have to get an
SR-22. A June 2002 study by the Insurance Research Council revealed that as many
as one-quarter of driving convictions never end up on motor vehicle records, due
to lack of shared information between courts and motor vehicle departments or
because a conviction has been erased through alternative means, such as driving
school. If you get your charge reduced in a plea bargain, or have a limited
license suspension, such as 30 days, it's also very unlikely your insurer will
find out about your conviction.
If your insurance company misses the conviction at the
time it happens, it has three years, according to most state laws, to cancel
your policy or raise your rates because of the DWI.
always go up
You may be surprised to know that when
your insurer does find out about a DWI conviction it doesn't automatically
impose higher premiums. The insurer will look at your history with the company
and your claims record, and your fate is in its hands.
For example, State Farm's action depends on which
subsidiary you're with. If you have a preferred policy with State Farm Mutual
Insurance Co. and receive a DWI, State Farm may move you into State Farm Fire
& Casualty, which is the standard-policy company. If you're moved from
preferred to a standard status, you'll be paying higher rates already. State
Farm will also review your motor vehicle and insurance claims history to
determine if it needs to raise your rates further.