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Being labeled a high-risk driver may feel like you got a lump of coal in your stocking. High-risk car insurance can be tougher and pricer to obtain than a standard policy because insurers see you posing a higher risk of making claims. This may be due to your age, spotty driving record, or past claims.
If your premiums have increased rapidly or you’ve been denied an auto policy, that’s an indication you’ve entered high-risk insurance territory. Fear not, it’s possible to get off the naughty list. Here’s your guide on how high-risk car insurance works, its cost, where to find a policy that fits your needs, and how to shed the designation and get back to better rates.
Learn more: How does car insurance work? The basics explained
Understanding high-risk car insurance
Auto insurance companies set rates based on risk. Drivers with no risk indicators pay less for insurance, while drivers with several risk indicators pay more. Risk indicators vary by insurance company, but they often include driver age, driving history, experience on the road, coverage history, and vehicle type.
Because insurance companies use proprietary formulas to evaluate risk, there is no universally accepted definition for high-risk insurance.
Complicating matters further, not all carriers will insure high-risk drivers, and those that do, charge higher rates. They may also restrict coverages and options. Coverages that are not state-mandated, like comprehensive and collision, may not be available on high-risk policies. Or, if they are available, the deductibles will be higher than average.
Learn more: 5 common traffic violations and how they affect your car insurance
What is a high-risk driver?
Insurance providers may determine a driver is high-risk due to the following:
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Has a history of accidents and/or comprehensive claims
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Has received numerous traffic violations
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Has been convicted of serious violations like DWI, DUI, or reckless driving
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Is required by the state insurance department to file an SR-22 certificate following a driver’s license suspension or revocation
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Has no history of auto insurance or a large gap in coverage
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Is young and inexperienced behind the wheel, usually aged 20 or younger
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Is age 70 or older
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Has a below-average credit score, outright bad credit, or negative history
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Drives a high-value, high-risk, or specialized vehicle such as a sports car
Learn more: How credit affects car insurance rates — for better or worse
While some carriers, like Progressive, go out of their way to avoid labeling drivers as “high risk,” having one or more of these factors will still influence your auto insurance rates and the types of coverage available to you.
Costs of high-risk auto insurance
If you’ve added tickets or accidents to your driving record recently, your insurance costs will rise. How much they rise depends on a wide range of factors, including location, driving record, and vehicle type.
According to Savvy Insurance Solutions, the average cost of auto insurance is 54% higher for someone with one at-fault accident than for drivers with a clean record. Data from Quadrant Information Services indicates that high-risk car insurance costs 62% more than average premiums for motorists with good driving records.
Ways to lower the cost of high-risk insurance
Being labeled a high-risk driver makes insurance more expensive, but you can take steps to mitigate costs and reduce your high-risk classification over time.
Improve (or maintain) your driving record
Your driving record includes your history of accidents, moving violations, and previous claims. If you are deemed a high-risk driver due to your driving record, you will need to “wait out” many of these blemishes. The timeline could be three to 10 years, depending on the infractions you have.
Even if your risk status is due to something else, maintaining a clean driving record can only help reduce your premiums and prevent other factors from impacting your coverage options.
Choose a practical vehicle
An unsafe, high-value, or specialty vehicle can increase your premiums and even bump you into a high-risk classification. Consider switching to a safer and/or more practical vehicle. Adding safety features can also help you qualify for discounts on your policy.
Watch your credit score
In many states, your credit score can affect your insurability and premiums. Make sure you're maintaining reasonable credit utilization and debt-to-income (DTI) ratios, limiting hard inquiries and new accounts, and avoiding late payments.
Take a defensive driving course
Many insurance companies offer discounts and rate reductions for drivers who complete approved defensive driving courses. Anything you can do to show insurance companies you’re a safe driver is a plus.
Maintain continuous coverage
If you’re stuck buying a high-risk policy at a higher premium, it can be tempting to forgo coverage altogether. This is especially true if you don’t own your own car or rarely drive. However, a lapse in insurance coverage — regardless of the reason — can increase your risk level and raise your premiums. Instead of creating a gap in coverage, consider buying a pay-per-mile or liability-only policy, especially if you don’t drive much.
Change coverage
You can lower your policy limits and raise your deductible, or opt for liability-only insurance instead of full coverage. But keep in mind that lower coverage levels and higher deductibles can mean higher out-of-pocket expenses if you’re in an accident.
Shop around
It’s wise to shop around and compare quotes anytime you are in the market for auto insurance coverage. If you have factors that make you a high-risk driver, this is even more important.
Learn more: Does buying car insurance online save money?
Finding affordable high-risk insurance
Finding affordable coverage can be challenging when you have multiple driving infractions. Always try to secure conventional coverage first. Your best bet is to gather quotes from companies that specialize in motorists with less-than-pristine driving histories. If you can’t find an insurer to provide coverage, try the state-run insurance pool or explore joining a family member’s policy.
Learn more: Cheapest car insurance after one at-fault accident
High-risk auto insurance companies
While high-risk auto insurance is sometimes referred to as a non-standard policy, some carriers are categorized as non-standard insurance companies. These companies specialize in providing coverage to drivers with special concerns or needs, such as high-risk drivers and those who need an SR-22 certificate or a non-owner policy.
These companies position themselves as being friendly to high-risk drivers:
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The General
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Dairyland
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State Farm
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USAA
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GEICO
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Nationwide
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Farmers
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American Family Insurance
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Allstate
Learn more: Best car insurance companies
Assigned-risk pool
Assigned risk pools, also known as state-run insurance pools, link drivers with carriers willing to offer them coverage after they’ve been denied elsewhere. These policies are still expensive, but they can provide you with coverage when you haven’t had luck applying directly.
While each state’s assigned risk plan has its own criteria, motorists could be forced into the pool for such violations as:
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Reckless driving offenses
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Speeding tickets
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At-fault accidents
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DUI/DWIs
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No insurance or inadequate coverage
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Inexperience behind the wheel
A driver’s age, location, and other factors may also impact their ability to obtain automobile insurance through the voluntary market. For instance, a 23-year-old with a DUI who lives in a high-crime area may be placed in the assigned risk pool.
Information about obtaining residual market coverage is often available on state DMV or insurance department websites, or you can inquire about high-risk insurance options directly with insurance companies or through an insurance agent.
Join someone else’s policy
In some cases, it may be cheaper and easier to join someone else’s existing auto insurance policy as a named driver, especially if you don’t own a vehicle. If you occasionally borrow your parents’ car, for example, they may be able to add you to their policy. Their premiums will likely see a big increase, but this may still be less than you’d pay for your own policy.
If you’re still finding it difficult to secure affordable rates due to your high-risk driver classification, it may be time to call in some professional help. Some insurance agents and brokers specialize in working with high-risk drivers to find and build a policy that meets your needs.
High-risk auto insurance FAQs
How long are you considered a high-risk driver?
Generally, you could be considered a high-risk driver until the most serious infractions drop off your record. Tickets can remain on your driving record for three to five years, while more serious offenses can hang around for five or 10 years. The timeline may also be affected by the insurance company’s policies, which is another reason to comparison-shop insurance periodically.
Is assigned risk the same as high risk?
Assigned risk is not the same as high risk. In auto insurance, assigned risk describes drivers who cannot get traditional coverage due to their poor driving records or other factors. These drivers must either give up driving or secure coverage through a state-sponsored program. High-risk drivers may have access to traditional coverage, but they will pay higher-than-average premiums.
What is the assigned risk pool?
The assigned risk pool is a state-sponsored system that makes auto insurance available for high-risk drivers. It is also called the residual market or assigned risk market. If you have been denied coverage from multiple providers, you can obtain limited coverage through the assigned risk pool. This system spreads the risk of covering those people among the state’s providers — and protects others on the road if they are involved in an accident with a high-risk driver.
Tim Manni edited this article.
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