The holiday season is merry and bright. People fill their weekends with holly-jolly parties with friends and family. And alcohol often goes hand-in-hand at these cheerful functions. Unfortunately, the holiday season is also known for being the deadliest when it comes to drunk driving. In today’s post, we will discuss the financial consequences of DWIs and DUIs.
According to the U.S. Department of Transportation, 839 people died in traffic crashes involving a drunk driver during the month of December in 2018. But these deaths didn’t impact just those individuals. It’s the loved ones they left behind that will be affected by the loss for years to come.
With the modern conveniences we have today, there is no excuse for driving drunk.
Going to a party and don’t think you’ll be sober? There’s Uber or Lyft. Get safely home by ordering a car ride at the touch of a button on your cell phone.
Just got home from a party and discover there are no good snacks for drunk eating? There’s Uber Eats, DoorDash, or Grubhub. Don’t get into your car in search of the perfect treat. Let the treats be delivered to your door.
These modern conveniences aren’t free, obviously. But paying for a 15 mile Uber ride is much cheaper than dealing with the financial consequences of a DWI or DUI.
The Financial Impacts of Driving While Intoxicated
- On average, a DWI/DUI could set you back $10,000 in attorney’s fees, fines, court costs, and more.
- The financial impact from impaired-driving crashes is devastating. Based on 2010 numbers (the most recent year for which cost data is available), impaired-driving crashes cost the United States $44 billion annually.
- If you’re caught drinking and driving, you can face jail time. No one wants to spend Christmas behind bars.
- Drinking and driving could cause you to lose your driver’s license and your vehicle. This could inhibit you from getting to work, resulting in lost wages and, potentially, job loss.
- Even after getting your license back, depending on your sentencing, you may be required to drive with an ignition safety device. The costs of these devices vary by state but installation is typically between $70 and $150 and come with an average monthly lease price of $60-$90.
- DUIs increase car insurance rates and affect buying life insurance.
How Driving While Intoxicated Affects Your Car Insurance Rates
The amount you pay for car insurance depends on your driving risk. In other words, statistically, what are the odds of you getting into an auto accident?
DUIs = high-risk driving = higher premiums.
Car insurance policies renew typically every six months or annually. Your rates are only locked in for that specific period of time. When your policy’s renewal date comes up, the insurance company reviews your driving record to determine if the rates need to change.
It is possible for car insurance rates to decrease with a history of good driving or low miles driven, for example. But if the insurance company sees a new DUI/DWI pop up on your record, you better believe those rates are increasing.
After a person’s first DUI, car insurance rates increase an average of 47%. For example, a driver without a DUI might pay $3,072 annually for car insurance, while that same driver will pay $4,516 after a DUI. Not your first DUI? Expect that number to be much higher.
What happens if your car insurance company denies you coverage?
Depending upon your conviction and driving history, your car insurance company may choose to not even renew your coverage. If your insurer chooses not to renew, finding insurance coverage with a recent DWI/DUI is going to be expensive and also may be challenging. You may have to shop around to many different auto insurance companies to find affordable premiums. There is even a chance that traditional insurance companies won’t approve you and you’ll need to turn to your state’s high-risk insurance pool, also called assigned-risk insurance plans.
Each state has its own assigned-risk insurance plans. To qualify for these plans you will need to prove you have tried to get insurance elsewhere and have been denied multiple times. Be aware that premiums for the assigned-risk plans are substantially higher than the national average.
What if the state requires I get SR-22?
When you’re convicted of a DUI or DWI, the state may require that you get an SR-22, also known as SR-22 insurance or Certificate of Financial Responsibility (CFR). SR-22 is a form your insurance company has to fill out and file to prove to the government that you are adequately insured.
This means your insurance company needs to be willing and able to file paperwork with the state notifying them of your coverage. There is a fee to file the SR-22, typically $15-25. The state usually requires this filing routinely for a few years after a DUI/DWI conviction to verify you are keeping your insurance in good standing at all times.
Paying for a 15 mile Uber ride is much cheaper than dealing with the financial consequences of a DWI or DUI.
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How Driving While Intoxicated Affects Your Life Insurance Rates
Every two minutes a person is involved in an alcohol-related crash. In recent years, approximately 30% of motor vehicle fatalities can be attributed to alcohol and recreational drug use. Life insurance companies are all about statistics.
Life insurance companies base their policies’ cost on mortality risk. Considering the statistics above, applicants with DUIs and DWIs are high-risk to insure. To balance out the risk of insuring individuals with a history of DUI/DWIs, the insurance companies require higher than average life insurance premiums.
If you’re applying for life insurance with a history of DUI/DWIs, the following are the most important factors affecting your costs:
- Your current age and your age at the time of violation(s),
- The number of violations you have had,
- How much time has passed since the most recent violation.
- The younger you were when you were convicted of the DUI, the higher your premiums.
- The more DUIs in your history, the higher your premiums.
- If you were required to have an ignition safety device installed, the higher your premiums.
- If your medical exam results show alcohol overuse, the higher your premiums.
- If your license is currently revoked or suspended due to driving violations, the higher your premiums.
If your violation is within five years of applying for life insurance, it’s not uncommon for the life insurance company to approve you but require a flat extra. A flat extra is a specific added dollar amount per $1000 of insurance coverage. The flat extra can be permanent or only required for a certain number of years. With driving violations, typically the flat extra is temporary.
John Johnson is 35 years old and applying for a 30-year $500,000 term life insurance policy. He’s healthy, but unfortunately didn’t always make the best driving decisions when he was younger. At age 27, he was convicted of his first DWI while driving home from a Christmas party. He was then convicted of a second DWI on his 30th birthday.
Today, John is a husband and father, has been steadily employed at the same company for a few years, no longer drinks alcohol, and has maintained a clean driving record since his last DWI.
The life insurance company approves John at Preferred but adds on $3.50 flat extra for three years.
A 30-year $500,000 term life insurance policy for a 35-year-old male at Preferred rates would typically be about $45 per month (or about $550 annually). But because John is required to pay the $3.50 flat extra for three years, this means John pays $2300 annually ($3.50 x 500 + $550) for the first three years, then it drops to $550 for the remainder of the term.
Depending upon the applicant’s other risk factors the insurance company may choose to table rate them instead. Typical table ratings start at Table A, or Table 1, and can run all the way to Table P, or Table 16. Each table rating is an extra 25% on top of the Standard price.
Kenny Cole is 35 years old and is applying for a 30-year $500,000 term life insurance policy. Kenny has high blood pressure and there is a history of heart disease in his family.
Kenny was convicted of a DWI at 32 years old and now only drinks socially.
The life insurance company approves Kenny at Table D due to the health risk factors and the fact that he does still drink alcohol. They also add on a $3 flat extra for the next three years since it’s only been two years since the driving violation.
A 30-year $500,000 term life insurance policy for a 35-year-old male at Table D rates would typically be about $170 per month (or about $1940 annually). But because Kenny is required to pay the $3 flat extra for three years, this means Kenny pays $3440 annually ($3 x 500 + $1940) for the first three years, then it drops to $1940 for the remainder of the term.
» Learn more: What Is a Substandard Life Insurance Risk Class?
In any situation, you can always reapply to a life insurance company later on to see if you qualify for cheaper premiums. In the meantime, however, if you have loved ones depending on you, we recommend you accept the current coverage offer.
If you have multiple risk factors, for example maybe you have sleep apnea, you’re overweight, and you have three DUIs, there is also the chance that the life insurance company will decline you. Some insurance companies will deem the risk too high to provide coverage.
With both car insurance and life insurance, it’s important to shop around for coverage if you have DWI/DUIs on your record. Insurance companies treat driving violations differently and some are more lenient than others. The financial consequences of DWIs and DUIs heavily impact your choices.
If you’re looking to buy life insurance, apply through Quotacy. We’re an independent life insurance broker. We have access to multiple insurance companies and will shop your case behind the scenes to ensure you’re getting the best rate. With DWIs and DUIs, it’s more of a challenge to get affordable coverage but your Quotacy agent will work hard to get you approved.
Get a free term life insurance quote today. No contact information needed until you’re ready to apply. Your application will ask if you have any driving violations in your past. Disclose these and your Quotacy agent will be able to set realistic expectations upfront. Your agent works for you, not the insurance company, and advocates for you.
Enjoy the holiday season and stay safe.
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