Why are car insurance surcharges added to premiums?

Your insurance company may apply a driver surcharge to your car insurance premium due to a traffic violation or at-fault accident, though missed payments and insurance lapses can also result in a surcharge. Surcharges are primarily meant to cover the additional cost or risk of insuring a driver with a poor driving record.

What is a chargeable accident or moving violation?

A chargeable accident is an accident, such as rear-ending someone, which your insurance company determines to indicate an increased risk of future claims or losses. Your insurance company may add an auto insurance surcharge to your premium as a result.

A chargeable moving violation is any event in which you receive a ticket and are convicted. This could be something as simple as a speeding ticket to a more serious event like receiving a DUI conviction. More severe offenses typically carry higher surcharges.

Important note: The types of accidents or violations considered chargeable vary by state and insurance company.

How much will an insurance surcharge affect my premium?

The amount of the surcharge depends on your insurance company, as well as the event that caused it. For example, an at-fault accident where you total another person's car might result in a higher surcharge than a minor fender-bender will.

How long will an auto insurance surcharge last?

An insurance surcharge could be temporary or permanent depending on the state, insurer, and the reason for the surcharge. Keep in mind that you can have multiple insurance surcharges applied to your policy costs. Suppose you're involved in more at-fault accidents, or you trigger another surcharge by a late insurance payment, a lapse in coverage, or another factor. In that case, you could face additional surcharges on top of the first.

How can I reduce or avoid a car insurance surcharge?

Once a surcharge gets applied to your premium, there's little you can do to reduce the surcharge itself. However, you might be able to reduce your overall rate by qualifying for an auto insurance discount.

The best scenario is to prevent insurance surcharges altogether. Observe driving best practices:

  • Drive defensively
  • Avoid following other drivers too closely
  • Watch your speed

Paying your insurance premium on time and avoiding coverage lapses will also help prevent surcharges.