High-risk Car Insurance
No one plans to become a high-risk driver, but certain behaviors, circumstances and incidents can make you a liability to your car insurance company. Falling into a high-risk category means you'll need a different type of policy and may be required to switch insurance companies to find a carrier that's willing to provide coverage.
What Makes Someone a High-Risk Driver?
While there is no official definition of a high-risk driver, insurance companies use some basic criteria to determine which motorists are more likely to file claims, including:
- DUI or DWI convictions.
- Speeding tickets.
- Unlicensed driving.
- Uninsured driving.
- Bad credit.
- Reckless driving or street racing.
- Involvement in fatal traffic violations.
- A history of serious accidents.
- Poor overall driving record.
- New, inexperienced or elderly drivers.
- High-risk vehicles, such as sports cars or collectible cars.
More claims mean higher costs for the insurer, which is why companies hesitate to cover drivers meeting these criteria under standard policies. Some factors, such as poor credit, are considered signs of irresponsibility and suggest a general lack of discernment. Others are beyond your control and automatically label you as a higher risk based on the average number of claims filed by motorists in your peer group.
The number and severity of violations and incidents on your driving record affect your level of risk. Insurance companies weigh infractions differently and base their coverage and pricing decisions on your record as a whole.
High-Risk Car Insurance Basics
Drivers considered to be a bigger liability to auto insurance companies usually must purchase high-risk policies. Classified as "non-standard" in the insurance industry, this type of coverage is offered to satisfy the legal requirement for drivers to have insurance in most U.S. states.
If you're involved in any type of high-risk behavior or incident, insurance providers may deny coverage under a standard policy or refuse to renew your current coverage. Living in a state that requires car insurance means you have to find a policy before you get back on the road, and high-risk coverage will often be your only option. Even if the law doesn't require you to purchase a policy, staying covered protects you and other motorists should another incident occur.
Where Can a High-Risk Driver Get Auto Insurance?
Many major companies offer car insurance policies for high-risk drivers. The best place to start is with your current provider. Discuss all the available options with your agent to see if comparable coverage is available and how much it costs.
If the company doesn't have an option for you, look for a provider specializing in non-standard insurance. These insurers tend to be smaller operations and work only with high-risk clients. However, it's important to be discerning when considering this alternative. Not all companies are able to make good on the policies they provide. Research companies via the National Association of Insurance Commissioners' Consumer Information Source, or work with a reputable broker to explore the possibilities.
If no company will sell you a policy, your last option is probably the "assigned risk" pool for your state. Motorists in this group are required by state law to be covered in order to drive, and companies work with government regulators to provide the necessary insurance. Belonging to the assigned risk pool is the least desirable situation, and your state may require you to remain there for a given period of time before you're eligible to look for insurance elsewhere.
High-Risk Coverage Rates
As with standard insurance, it pays to shop around when looking for a high-risk car insurance policy. The rates will always be higher due to the increased cost to the insurance provider, but taking the time to compare similar policies from different companies can help you find the most affordable option. Online comparison tools are helpful if you want a quick way to assess rates and coverage from a wide selection of providers. In some cases, you may be able to find a car insurance company willing to sell you a standard policy.
How much you will pay for your policy depends on how much risk you pose. A couple of speeding tickets will cost you less than a severe accident, and multiple violations could drive premiums up even more. Landing in the assigned risk pool in your state could mean paying two to three times the national average for your coverage.
Lowering Your Risk
Being labeled high-risk doesn't mean the end of your driving career. You may have to pay more for car insurance for a while, but there are several ways you can work on lowering your risk in the meantime, such as:
- Taking defensive driving courses.
- Obeying all traffic laws.
- Stopping risky driving behaviors.
- Committing to being a safe driver.
- Switching to a more common type of vehicle.
- Renewing your insurance policy and driver's license on time.
- Managing debt and making timely credit card payments.
The violations putting you in the high-risk group are only on your record for a finite amount of time, and your risk will drop once they expire. This period depends on the type of violation and may be anywhere from a few months to several years.
If your auto insurance company labels you as a high-risk driver, remember it isn't permanent. Mistakes happen, and motorists are subject to unpredictable incidents. Insurance companies understand this and will issue standard policies to drivers whose level of risk lowers over time.
Find the most affordable high-risk car insurance policy you can, and take steps to reduce your risk. Being proactive and responsible will build trust with insurers and help clean up your driving record so that you can return to a standard policy in the future.