Impact of Penalty Points on Insurance Premiums Revealed
Drivers with points on their licence in the UK are collectively being charged £132 million on top of the average cost of car insurance
This is a result of their infractions, according to research conducted by the Institute of Advanced Motorists.
This means that anyone with between one and three penalty points on record will be paying up to five per cent more than anyone who has managed to avoid being penalised in this manner. And so the financial benefits of having a clean licence can be significant when it comes to insurance.
Perhaps unsurprisingly, there is a sliding scale of how much extra premiums will be depending on the total number of points that a person has accrued. And those who manage to rack up ten or more will usually be faced with the steepest increase, as analysts have identified this group as paying 80 per cent more than their law-abiding counterparts.
The largest group, consisting of those with three points or fewer, is only the second-largest contributor to the £132 million total, paying out £49.5 million each year to cover the additional calculated risks that insurance firms theoretically take on when providing them with cover. Those with between four and six points make a larger chunk of the total, with £57.4 million being injected into the insurance industry as a result of their higher premiums.
Interestingly, the report also revealed that there are regional differences in just how much people are paying to insure a car if they have points on their licence, meaning where you live will determine the number of motorists around you that are punished by higher premiums. London residents suffer the most, followed by those living in Glasgow and Birmingham.
There is a stark difference between the comparatively slight five per cent rise in car insurance costs for those with three or fewer points on their licence and the 25.8 per cent jump upwards that those with four to six points need to pay. So this should be an added incentive to follow the rules of the road and avoid speeding, as the cost of the ticket will need to be factored in along with the likely rise in insurance costs.
Report spokesperson Sarah Sillars said that the punitive action taken by the authorities following a motoring infraction was not necessarily taken seriously by motorists, but by highlighting the costs associated with failing to drive safety, it would hopefully be easier to show road users why it is important to take things such as speed limits seriously.
Sillars also said that changing driving habits and improving the experience for all motorists would not only be beneficial in terms of safety but would also mean that people are potentially saving thousands of pounds over the course of their automotive lives, according to AutoExpress.
The nature of the insurance market means that while some customers are charged higher rates as a result of their motoring history, costs may also be passed on to other customers who have a clean licence. This means that it is in the interests of all involved to reduce the number of points that are handed out to British drivers, with the financial incentive certainly being strong and easy to quantify compared to abstract arguments about safety.
Thankfully, the report also revealed the parts of the country which are having to contribute the lowest amounts to the £132 million total of additional insurance charged related to penalty points, with Bath and Plymouth coming out on top in this respect. Both of these cities manage to rack up less than £1 million apiece between motorists, which is reassuring for residents.
Insurance is a necessity for all British drivers, and while premiums have fallen in recent years, there are still ways in which savings can be made, with a lack of penalty points being one of the most obvious.