NJ Penalty Points and how it raises your costs

 

Penalty Points means points used to determine the dollar amount increase that will be added to the standard premium of the policy. These points shall be accumulated based on the driving experience of an operator and as a result of Violations/Convictions, License Suspensions/Revocations and At-Fault Accidents as set forth on the abstract of a driver’s license record available from the New Jersey Department of Motor Vehicles or comparable regulatory authority of another state and other sources.
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IV. ADDITIONAL CHARGES:

A. Penalty Points may increase premium based upon one or more of the following:

1. Violations/Convictions

2. Driving Experience

3. License Suspension

4. Nonpayment Cancellation

5. At-Fault Accident

B. Experience Period

1. Charges are assessed for violations that fall within the three-year period immediately preceding the date of application or ending 90 days prior to the expiration date of the current policy for a renewal policy. Points for violations accrue when the event is recorded in the records of the New Jersey Division of Motor Vehicles or comparable agency of another state.

2. Charges for Inexperienced Operators are imposed when any operator has not been licensed for the three-year period immediately preceding the date of application or renewal. For rating purposes, a valid Learner’s Permit is a license. Use the date the permit was issued as the effective date for the Inexperienced Operator charge.

3. Charges are assessed for each full year of a court imposed driver’s license suspension that falls within the three-year period preceding the date of application or ending 90 days prior to the expiration date of the current policy for a renewal policy.

4. Charges are assessed for cancellation for nonpayment of premium with a lapse in compulsory coverage for a period of at least 30 days if such cancellation occurred within the two-year period immediately preceding the effective date of coverage. One penalty point will apply regardless of the number of instances defined in this paragraph until no defined nonpayment coverage lapses exist in the two-year period preceding the date of coverage.

5. Charges are assessed for at-fault accidents when payment by an insurer totals

a. $500 or more for accidents that occurred prior to June 9, 2003;

b. $1,000 or more for accidents occurring on or after June 9, 2003

provided the claim payment falls within the three-year period immediately preceding the date of application or ending 90 days prior to the expiration date of the current policy for a renewal policy. However, where the date of the claim payment is unknown, the assigned carrier may use the date of loss in lieu of the date of the claim payment for the purpose of determining the appropriate charge.

C. Applicability of Charges

1. Penalty Points are assigned on a per-operator basis.

2. For the purpose of this provision ONLY, the term “operator” shall include

a. the named insured,;

b. any regular operator of the covered auto(s); and

c. any household member with a suspended driver’s license who has either been convicted of a violation of the Compulsory Insurance Laws (penalty provisions, N.J.S.A. 39:6B-2) within the previous three years or other existing evidence indicates that the suspended or revoked driver has operated a motor vehicle during the period of suspension;

provided each household member is not being surcharged on another policy.

3. At-fault accidents and convictions resulting from the operation of commercial autos are chargeable provided that they meet the criteria of this provision.

4. Points shall not be assigned for an accident or conviction:

a. involving an operator demonstrated to be a named insured on another policy; or

b. where the named insured is a corporation and the principal of the corporation is a named insured on another policy;

and for which it is demonstrated that the other policy has been surcharged for the accident or conviction.

5. Single Auto Policies

The penalty points applicable to each covered operator shall be totaled and the Additional Charges applicable to each operator, on an individual basis, shall be totaled and assessed on the auto.

6. Multi-Auto Policies

The penalty points applicable to the principal operator of each auto shall be totaled and the corresponding Additional Charge shall be assessed on that auto.

Where a driver is the principal operator of more than one auto, the Additional Charge associated with such operators shall be assessed to the auto with the highest Total Base Premium.

Penalty points for occasional operators shall be totaled separately for each such operator and the corresponding Additional Charges shall be assessed on the auto to which the occasional operator has been assigned.

Surcharges associated with each individual with a suspended driver’s license shall be applied to the auto with the broadest coverage. Surcharges associated with each licensed operator shall continue to be applied in accordance with the provisions of this subsection (C.6.).

Surcharges associated with cancellation for nonpayment of premium with a lapse in compulsory coverage for a period of at least 30 days shall be applied to the vehicle with the broadest coverage.

D. Penalty Points

Multi-Auto Policies

1. Qualified and Qualified Eligible Applicant Penalty Points

Points for convictions shall accrue when the event is recorded in the records of the New Jersey Division of Motor Vehicles or comparable agency of another state.

For violations occurring in New Jersey, those convictions which appear on a motor vehicle driving abstract with a “V” in the Event Code column shall be used in assessing points if they are listed in the tables below. Violations which appear with Event Code “O” shall not be used.