Auto insurance companies rely on anticipating and accounting for risk. If you are a high-risk driver, you are not ideal for an insurance company. Your high-risk driver status for an insurance company comprises your driving behavior and non-driving factors. Your driving and claim records are primary indicators of your “risk level,” but other factors include age, credit score, and location.
Am I a high-risk driver? Driving factors considered by insurers:
When an insurance company calculates your auto insurance policy premium, it weighs driving-related and non-driving factors to determine how much risk you pose. Insurers typically look at the amount of:
- Claims for fault
- Transit taxes
- reckless driving
An at-fault accident, especially with a bodily injury payout, can be an essential indicator of insurance risk. It’s not just a financial burden on the insurance company, which is responsible for the damages through liability coverage. Still, a continual accumulation of risk as the company insures you in the future. An at-fault car accident increases auto insurance premiums by an average of $767 per year.
What makes you a high-risk driver? Non-driving factors:
Many factors influence auto insurance rates, some of which are unrelated to your driving record—non-driving related red flags commonly used by car insurance companies.
To an insurance company, your credit score reflects what kind of driver you will be. FTC studies show that drivers with low credit scores are more likely to file a claim than drivers with better credit, and when drivers with lousy credit file claim, they lead to more expensive payments. Whenever there is more risk, your insurance company will protect itself by charging an inflated premium.
Where can I buy high-risk auto insurance?
Due to some drivers’ risks, there are cases where there is no car insurance company, not even non-standard insurers. Which specifically cater to the category of high-risk drivers, will issue you a policy regardless of how much you are willing to pay. To pay In these unique circumstances, assigned risk insurance comes into play. Assigned risk insurance is the last resort for drivers with abysmal driving records looking for car insurance.
To qualify for assigned risk insurance, you must show that you tried and failed to obtain insurance multiple times and have been denied based on your driving record. Once that happens, an insurance agent will send a report to the state notifying you that you need assigned risk insurance. Unfortunately, assigned risk insurance is often expensive.
Being “too risky” for an insurance company is not a definable quality. The best thing you can do is find affordable high-risk auto insurance and shop around.
Here are some companies that serve high-risk drivers:
- Bristol West
- the general
What is high-risk auto insurance?
High-risk car insurance is no different than regular car insurance. However, what is different is the driver. Insurance companies are not eager to cover drivers with a history of at-fault accidents, speeding tickets, or other violations, as they are more likely to file claims. Similarly, data suggests that younger drivers who have poor credit or live in specific zip codes are more likely to file a claim or have one filed against them. Because of this added risk, high-risk drivers almost always pay higher insurance rates and have a smaller choice of insurance companies to choose from.
How much does high-risk car insurance cost?
High-risk drivers will pay more for car insurance. However, the increase in your premiums will vary based on several variables. For example, a DUI/DWI conviction can increase your premiums by about 71%, which adds up to an extra $549 for a six-month policy. On the other hand, a speeding ticket could increase the cost of a six-month policy by an average of $168.
What makes a driver high risk?
Driving and non-driving factors can cause an insurance company to classify a driver as high risk. Driving factors include things like a history of at-fault accidents, a large number of claims, a hit-and-run, or a DUI. Non-driving factors include the driver’s age, gender, address, vehicle, or credit score (except in Hawaii, California, and Massachusetts). Any of these factors could cause an insurance company to consider you a high risk.
Which company has the cheapest car insurance for high-risk drivers?
It depends on your situation. However, among the major airlines, USAA tends to provide the cheapest coverage for drivers in several high-risk categories, such as poor credit, at-fault accidents, and speeding tickets, among others. However, since USAA is only available to those in the military (or their immediate family), other companies that offer lower rates include GEICO, Nationwide, and State Farm, although prices depend on the offense. Chances are one of the major airlines is not showing the cheapest fare. For this, it might be worth looking for a non-standard insurance company specializing in high-risk insurance.
What if I can’t find auto insurance?
If you are denied coverage from a standard carrier, your best course is to seek out what is known as a non-standard carrier. These insurance companies specialize in insuring drivers who don’t have the cleanest driving record. While you may waive some of the benefits offered by standard providers like GEICO or State Farm, you are more likely to find coverage. However, if your driving record is such that even non-standard carriers are wary of carrying you (those with a hit-and-run or multiple DUI convictions), most states have what’s known as a high-risk pool. Your state may require insurance companies to provide automobile coverage for these drivers. However, keep in mind that this coverage is not likely to be cheap.