Finding affordable auto insurance for high-risk drivers can be a challenge, as they may be prone to accidents and traffic violations. However, there are additional factors that can contribute to someone being labeled as high risk, such as being young or inexperienced, lacking recent coverage history, or having a poor credit score. These factors can lead underwriters to classify individuals into the risky category and charge them higher rates. Despite these difficulties, this post aims to provide guidance on how riskier drivers can secure more affordable vehicle insurance.
Even skilled drivers can encounter difficulties on the road. What distinguishes a poor driver is the regularity with which they experience accidents and receive traffic tickets. You might have maintained a good driving record for ten years, but then unexpectedly find yourself involved in a few unfortunate collisions and receiving citations for traffic violations. Consequently, you become stigmatized and face challenges in obtaining affordable auto insurance due to your unfavorable driving history or credit. It takes a considerable amount of time for your records to be cleared and for claims to no longer impact your car insurance premiums.
HOW DRIVERS ARE CATEGORIZED
Underwriting is all about risks and they can classify it in many ways depending on various factors like age, gender, experience, recent claims and tickets. Here are the categories based on DMV records, according to the Insurance Information Institute.
- PREFERRED: Any insurer would be happy to offer the best rates for the people on the top class as they would have spotless records, no claims for years and even have great credit scores.
- STANDARD: They would still love to insure them but may not offer the best prices because their records aren’t exceptional. They have clean records and no claims but don’t have them long enough or there is something in their history if you go long enough.
- NON-STANDARD (High-Risk): These are the drivers that have had several crashes and scrapes with traffic laws. They may have several claims and traffic tickets or one big issue like causing a reckless accident or DUI. Nevertheless, most of these people will be able to find coverage even though they are likely to pay a hefty price.
- ASSIGNED RISK: These are so bad that they cannot find any policy in the open market. They will need to talk to their State Insurance Department to be allowed into “assigned risk” programs. Assigned risk is a system designed to get uninsurable drivers insured. These programs are offered under the supervision of states and therefore can differ. The companies accepting applicants from assigned risk pools normally charge significantly more. And, people may need to prove that they tried hard but have been refused several times.
WHAT ELSE MAKES YOU NON-STANDARD RISK
You may be considered as a less than desirable applicant even if you don’t have serious motoring problems like above and need to find affordable high risk auto insurance companies. These factors may not put you in the “assigned risk pool” but they will be influential enough to make it harder to find reasonable quotes.
- EXPENSIVE TO INSURE CARS: Certain automobiles with big engines like sports cars are more expensive. With powerful engines they can speed fast and can cause larger damages. Having one of those automobiles alone can double premiums.
- EXPENSIVE TO INSURE ZIP CODES: Certain areas like city centers with high crime and congestion can easily double the costs in comparison to sleepy towns with easy to drive roads.
- YOUNG AGE + NO RECORD: Having no experience or record is enough to raise prices. That is why it may not be a good idea to allow a policy lapse. The premium would go up even further if you are a teenager as well as a novice. It is probably the only reason why you wouldn’t want to be a teenager as car insurance costs can double or triple. You will have to wait several years before vehicle insurance goes down to reasonable levels.
- BAD CREDIT HISTORY: Insurers cannot deny coverage because of a bad score but they can come up with prohibitive rates by applying surcharges. For example, having a really low credit score (as a result of bankruptcy, debt judgement or collections) would be enough for many companies to increase auto insurance rates by as much as 50%.
TIPS TO GET AFFORDABLE CAR INSURANCE FOR HIGH RISK DRIVERS
You probably know why you are getting expensive quotations. If you don’t, you can ask them why. Insurers have to tell you why rates have gone up. Here is what you can do when you realize you are grouped in with riskier drivers.
- TAKE A DRIVING COURSE: If you are encountering challenges in finding affordable car insurance rates due to factors such as having multiple points on your license or a history of accidents, it may be beneficial to demonstrate your commitment to improvement. One way to do this is by enrolling in advanced or defensive driving courses. By taking proactive steps to enhance your driving skills, you signal to insurers that you are actively working towards becoming a safer driver.In many states, authorities may offer the option of attending a driving course instead of taking punitive measures for offenses like speeding. This presents a valuable opportunity that you should consider if it’s ever extended to you. Successfully completing an authorized defensive driving course may also allow you to have points removed from your license. To determine if you qualify for these incentives and discounts, as well as to identify relevant courses, it is advisable to check with your insurance provider or your state’s department of motor vehicles.
- TRY TO QUALIFY FOR OTHER DISCOUNTS: Experiencing unfavorable rates due to any of the aforementioned reasons doesn’t necessarily disqualify you from benefiting from other available discounts. Even if you have a poor recent driving history, you may still have an excellent credit score, which could make you eligible for substantial discounts. It is advisable to seek out companies that offer significant discounts based on credit scores in such cases. Moreover, there are discounts unrelated to the factors mentioned above that you can take advantage of. These may include discounts for paying your premium in full, being a member of specific organizations, or bundling your home and auto insurance. While the other factors may increase your premiums, these discounts can help mitigate the overall costs.
- BUY A PAY AS YOU DRIVE POLICY: These policies offer a viable option for individuals who typically exhibit good driving habits but have recently experienced unfortunate incidents. Additionally, they can assist young drivers in obtaining cost-effective coverage. By analyzing the data gathered from the telematics device installed in the vehicle, insurers can verify that you are indeed a safer driver than your recent history implies. In fact, numerous surveys indicate that individuals have shown improvement when they are aware of being monitored. Hence, usage-based programs serve as a favorable method to secure affordable car insurance for motorists who are perceived as high-risk.
- THINK ABOUT YOUR CAR: If you’re currently facing challenges in finding an affordable insurance policy, it’s important to avoid compounding the issue by selecting a car that is expensive to insure. It would be wise to consider acquiring a more modest vehicle, at least until your circumstances improve.
- CONSIDER HIGHER DEDUCTIBLES: Choosing higher deductibles means you’ll pay more out of pocket in the event of a claim, but it can lower your auto insurance premiums. Evaluate whether you can afford a higher deductible before selecting this option.
- SHOP AROUND: Every car insurance provider utilizes their unique methods for assessing risk and calculating premiums, making it beneficial to explore multiple options. When faced with particularly high premiums, there is a greater incentive to obtain several quotes and compare prices. Even 5% lower rates can translate into many dollars. Additionally, while many companies compete for standard and preferred risk drivers, finding affordable vehicle insurance rates for high-risk drivers can be more challenging. However, it’s worthwhile to make extra effort in searching for reasonable quotes, as the more quotes you obtain, the higher the likelihood of discovering a company that is more accepting of your imperfections.
- SEEK ADVICE: Consult with an independent agent or broker who can help you navigate the auto insurance market and find the best coverage options for your situation. They may have access to specialized insurers or knowledge of discounts you may not be aware of.
WHAT TO DO IF YOU ARE DENIED COVERAGE?
When insurance companies deny coverage for your automobile, it may be necessary to reach out to your State Department of Insurance to explore options available through the Assigned-Risk pool. They will guide you on the process of contacting companies participating in this program. It’s possible that you may need to accept expensive car insurance temporarily to maintain coverage. However, you may be able to come out of assigned risk programs and find coverage in the market after a year of accident and traffic violation free driving history, in most cases.
The good news is that your driving history can gradually improve over time if you remain cautious and avoid trouble on the road. If you can avoid any more accidents and traffic violation citations, you can expect your premiums to decrease within the next year. Furthermore, each subsequent claim-free and violation-free year will contribute to a further reduction in your premium costs. Stay committed to safe driving, and you will likely see a positive impact on your insurance rates.