It’s a given that getting a DUI will increase your car insurance rates. But did you know that having a DUI on your record can make it more difficult to buy a life insurance policy? If you didn't, you're not alone. LIMRA reported that only 36 percent of people knew driving behavior affected life insurance rates. In fact, having more than one DUI can make it next to impossible to obtain a policy.
Insurance companies look at a number of factors when deciding your life insurance premium. This includes your gender, age, lifestyle, and driving record.
Why do your driving habits matter when it comes to life coverage? They’re one-way insurance companies can tell whether you’re a risk-taker or not.
This means that if you have a spotless record besides the odd speeding ticket, your insurance rates likely won't be affected. But if you have numerous speeding incidents or even one DUI, your insurer could put you in the "impaired risk market."
People who fall into the impaired risk category pay higher premiums or may have trouble getting insurance at all.
"DUIs matter to life insurance companies because statistically 31 percent of all traffic-related deaths involve alcohol," says Mike Raines, owner of Raines Insurance Group.
According to mchmha.org, a driver who has a DUI that is less than two years old shouldn’t be surprised if they can't find coverage. Other risk factors such as health conditions like cancer or heart disease also determine whether or not a company declines someone or raises their insurance rates astronomically.
Even drivers with DUIs that are older than two years won’t have much luck finding a policy if they habitually abuse alcohol or drugs.
When you apply for life insurance, the company will want to know:
- How many DUIs you've had
- When you got your DUI(s)
- The severity of the incident
- Rehabilitation efforts
Number of DUIs
In the world of life insurance, how many DUIs you've had matters. According to Life Happens, if a driver has one or two DUIs on their record over the course of 10 years, they'll have mixed luck when applying for a policy. Some insurers will deny you completely, while others may ignore your past. But if you've had more than three DUIs in 10 years you'll have difficulty getting life insurance anywhere.
Raines notes that insurers typically don't want to see more than one DUI within the last five years.
"Life insurance companies that specialize in underwriting individuals with DUI history will typically consider one DUI as an accident or a mistake. And two DUIs is an alcohol consumption problem and not just another mistake," Raines says. "Once two DUIs is on the motor vehicle report, an insurance carrier will typically want to see no more use of alcohol drinking. And at least three years wait since the last DUI before they will make an offer."
Still, even if an insurance company will sell you life coverage, Raines warns your rates will be high.
Best Ways to Save with a DUI
One of the best ways to save on life insurance even when you have a DUI is to shop around. While you'll have higher insurance rates because of your driving record, how severely they’re affected will differ from company to company. One insurer might charge you $100 more for the exact same coverage. You won't know until you compare prices.
"It is important to remember that all life insurance companies look at your lifestyle and health differently," says Raines. "So, some life insurance companies will be better than others when evaluating a DUI history. Shop around with a special risk agent to find the best carrier in the marketplace for each particular situation."
Beyond that, to get lower insurance rates in the future you'll want to avoid getting any more DUIs or driving violations. Keep in mind, your rates will be affected for about five years in most cases.
Your insurer will want to have evidence that you're working to prevent any future DUI events. You can achieve this by completing a driving course or a rehabilitation program.
"To get a better offer after DUI history [you should] stop drinking, have no other moving vehicle violations on your record, and have regular doctor visits with documentation of good health and no use of alcohol," says Raines.
Another guaranteed way to save is to quit smoking. Smokers can get charged an extra 50 percent over non-smokers. And if you have more than one type of coverage, you should consider bundling your insurance. You could buy your car, life, and home policies from the same insurance company and save more than $400 a year in some cases.
Frequently Asked Questions
Q: Can you get life insurance after a DUI?
A: If you try to get life insurance right after a DUI, you'll be hard-pressed to find coverage. But this doesn't mean you'll never be able to get a policy. Generally, you'll need to wait a year after getting a DUI to apply, provided you don't have any subsequent incidents and aren't abusing alcohol.
There are some incidents where people have bought coverage before a year has passed, but this is rare.
Q: Could my policy be cancelled because of a DUI?
A: Luckily, if you receive a DUI after you buy a policy, your insurance company can't cancel your coverage. In fact, even if you have term life insurance, your provider must allow you to renew your policy until you're 75 years old.
Nevertheless, that doesn’t mean your insurance rates will stay the same. This means if you've received a DUI since you bought your policy, your rates could go up.
If they do go up, again, don't be afraid to shop around. "If [your life insurance] plan has been in force for many years then the renewal rates could be very high. Whereas you may can find lower rates with a new carrier even if you have had a DUI," Raines says.
Q: How much will my life insurance rates go up after a DUI?
A: Like most situations, the amount your premium will go up after a DUI varies depending on your particular case.
When an insurance company determines your premium, they place you in one of several basic classifications. In order of those with the lowest to most expensive rates, the categories are:
- Standard plus
There are also separate categories for smokers: preferred smoker and standard smoker.
Even if you're in good health, Raines advises that someone with one DUI within a year or less will likely pay 50 percent more than standard rates. If it's been one to three years, you'll probably be placed in the standard plus category. He notes you won't start seeing preferred ratings until at least four years, and at five years you might classify for preferred best.
If you have two or more DUIs? You'll pay a much steeper price. "With two DUIs, your best case scenario is probably a 125 percent rate up above standard after five years," Raines says.
Q: Why does it matter to life insurance companies if I have a DUI?
A: Having a DUI affects your life insurance rates because a DUI is a sign of recklessness. Even a single DUI on your driving record signals to many insurers that you’re a high-risk applicant who is prone to self-destructive behaviors.
Q: How long until my DUI no longer affects my life insurance rates?
A: According to Shelia Bridgeforth, vice president and account team lead of global communications at Prudential, a DUI typically affects insurance rates for five years.
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