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My car insurance bill went up after one ticket - is that fair?

I got a ticket for speeding (15 km/h over the speed limit) in August, 2010, but without any demerit points. I have a G2 licence in Ontario. My insurance company has now increased my rates citing this ticket. Are they justified? Also, will it help in reducing rates if I remove my name from my wife's car? (We have two cars and we usually drive either/or). - Gerson in Mississauga, Ont.

Chances are your insurance company has lots of statistics to say that your risk has increased, but is this really fair?

As you've experienced, traffic violations that are considered by regulators and law enforcement authorities to be "minor" (such as not wearing a seatbelt, or speeding less than 15 km/h above the posted limit) can affect your premium.

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Of course the insurance companies have their reasons for price increases. "Speeding tickets have a strong correlation with the occurrence of a future accident. The rates charged for such violations must be filed and approved by insurance regulators. The only way a regulator will approve rates is if they are justified and supported by an actuarial [statistical]analysis," says Robin Joshua, director, corporate underwriting and risk management, CAA Insurance Company (Ontario).

In Ontario, automobile insurance is regulated by an agency of the Ministry of Finance. "Each insurance company must file their rules and guidelines with the Financial Services Commission of Ontario. They've all been rubber-stamped, so they're justified in that they've been given permission by the province," says Anne Marie Thomas of InsuranceHotline.com.

Most insurance companies adhere to conviction surcharging – though this can vary from company to company.

"The first minor traffic violation, such as a speeding ticket, may have little or no impact on your insurance rates. A driver's rates will go up following a second or third minor violation in a three-year period. The industry standard for increases is between 10 to 15 per cent for two violations in three years, 25 to 35 per cent for three violations in three years and 50 per cent or more for four violations in three years," says Joshua.

So, with only one minor traffic conviction, why has your premium increased? When it comes to motorists holding restricted licences (such as your G2 designation in Ontario), insurers typically have even less tolerance for mistakes.

Most insurers offer a minimum 10 per cent reduction to motorists with a clean driving record. Many also offer "forgiveness" for the first minor conviction – but again, because you hold a restricted licence, you may have lost your conviction-free discount due to just one offence.

Now that your record is blemished, will excluding yourself from the policy for your wife's vehicle help in reducing rates? That depends. Insurance doesn't just vary by province, it varies within each insurance company. To find out what's best for your particular case, you need to have a conversation with your insurer.

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"Each situation is so different, with different nuances, and the same situation or same couple can have five or six different quotes for exactly the same vehicle – because insurance companies each have different rules and guidelines," says Thomas.

If you're not satisfied with your current policy, why not shop around and try to find a better deal? Oh, and take care to ensure you don't get any further penalties on your record.

E-Mail Ask Joanne at globedrive@globeandmail.com

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