UK survey highlights effects of penalty points on insurance

Insurance premiums can cost up to 90 percent more for driving offenders in the UK who have accumulated larger numbers of penalty points.

The fact that insurance costs more if the driver has penalty points is well known since premiums are risk based and being a proven offender is an indicator of such risk. However, the general level of increased cost hasn’t been so well known until now.

The Institute of Advanced Motorists (IAM) and insurance portal MoneySuperMarket teamed up recently to perform some research into the link between the acquisition of penalty points and the amount by which premiums increase as a result. Overall, they found that the extra insurance costs for motorists in the country with penalty points on their licences is around £132 million annually.

When performing the research, the organisations grouped penalty points into five categories and compared costs by geographical region, finding that London, Glasgow and Birmingham were the top three most costly postcode areas with drivers paying up to £8 million more each year in London compared to some of the smaller towns in the provinces. Penalised motorists in Bath and Plymouth pay the least in excess premiums.

The five groups of penalty points of up to 3, 4-6, 7-9, 10-11 and 12 or more showed expected results with those with up to three penalty points receiving insurance penalties amounting to just over 5% more than a penalised driver whilst those with 12 or more points pay nearly 90% more than drivers with clean licences.

Commenting on the results of the survey, the IAM’s CEO, Sarah Sillars said, ““If people don’t understand the dangers of motoring offences, they should certainly understand the damage it will do to their bank balances. People with multiple points and fines are paying a lot more for car insurance so driving safely could put thousands back into their pockets.”

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Legal and Insurance

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