What is a surcharge, how is it calculated and why does it exist?
A surcharge is the amount of money by which your premium is increased based on Safe Driver Insurance Plan (SDIP) points assigned to your policy. SDIP points are assigned after you are involved following in an at-fault accident and/or one with damage exceeding predetermined amounts, depending on the state. Most states also allow surcharges for motor vehicle convictions. A surcharge is usually added to the policy upon the first renewal following the accident or conviction. The Safe Driver Insurance Plan (SDIP) was implemented by the majority of states and insurance companies to fairly distribute the rising costs of auto insurance among policyholders. Drivers with accident-free records pay the lowest possible rates. Those who have had accidents or convictions pay more through surcharges added by SDIP points.
