Final answer:
Insurance surcharges can be triggered by major traffic violations, at-fault accidents, and driving under the influence. Such infractions are indicators of high-risk behavior, leading to higher premiums for those individuals.
Step-by-step explanation:
Insurance companies often levy a surcharge on drivers who exhibit behavior that indicates a higher risk of filing claims. Three infractions that generally result in a higher insurance surcharge include major traffic violations, such as speeding or reckless driving; at-fault accidents, where the driver is responsible for the collision; and driving under the influence (DUI) or driving while intoxicated (DWI).
These activities suggest a pattern that could lead to more expensive claims, thereby justifying higher premiums for the at-risk driver. In the fictional data provided, if a driver with a history of major accidents is considered high-risk, this classification would impact their insurance cost significantly. In the simplified example, the insurance model relies on spreading risk across all policyholders, with each driver paying a $1,860 premium to cover the total annual damages of $186,000. However, specific individuals with risky behavior may find themselves paying more due to surcharges from these infractions.