Many drivers don’t fit in the usual rate structure of most insurers because of their driving records, age, credit score, driving licenses and many other reasons. That is why most traditional insurers deny coverage or quote very high premiums for these higher risk applicants. As the market gets competitive, good drivers get cheaper rates and risky drivers are denied of standard rates. Also, larger insurers get choosy about the types of risks they accept. Non standard automobile insurance companies step in to fill this void to meet higher risk insurance demand.
Nonstandard insurers insure the types of risks that are denied by standard auto insurance companies for being too risky or just not fitting in their usual rate criteria, like having a foreign driver license or unusual classic car.
Who Are Considered As Non Standard Drivers?
Lately, more and more drivers are considered high risk by large numbers of insurers. Having too many tickets and accidents, being young and having an unusual or unflattering driving license, and having bad credit record are some of the reasons why you may be considered as nonstandard risk. Also, having a salvaged or sports car can make you a high risk.
Some high risk drivers like teenagers may still find insurance from the usual companies even though they may have to pay high premiums. And most reputable companies will refuse problematic drivers like the ones with recent license suspension due to too many traffic violations or one severe incident like DUI. Actually, drivers don’t need to do much to fall into this class in some cases. Just wanting a basic state minimum car insurance may be enough to put off some companies as a few of them are not offering basic coverage.
Non Standard Auto Insurance Companies
Having limited choice of insurers can put non-standard drivers between a rock and a hard place. A few nonstandard carriers may want to take advantage of the position their applicants are in by offering substandard auto insurance coverage at expensive prices. Sometimes, choosing an insurer under such circumstances may be a case of finding the lesser evil. In any case you don’t have much choice since you need insurance to drive. What you need to remember is that this may be a temporary situation if you can correct the problems that made you an undesirable policyholder.
Saying that there are a few decent nonstandard car insurance companies. Actually, some of the largest vehicle insurance carriers offer substandard policies through their subsidiaries. We have already prepared a non standard auto insurance companies list in another post to help our readers.
Non-standard car insurance companies offer to insure drivers that are considered too high risk by other insurers. And most sensible nonstandard drivers prefer paying high premiums to driving without insurance.
Being labeled high risk makes it expensive to buy a policy. However, you may still have wide range of coverage options. And you can still choose even though number of insurers may be limited. You are not as hopeless as someone who cannot find insurance and has to look to state authorities for an assigned risk policy.
Things to Know about Nonstandard Auto Insurance
Like most things in life, there are a few tricks to buying non standard car insurance coverage. Knowing them will help you navigate the narrow streets. Here are a few of them.
- Lapse in insurance, lack of consistent or unbroken insurance history, too many cancelled policies due to non-payment are some of the few things that can make you undesirable in the eyes of reputable insurers. So, you should try to keep a steady insurance history and avoid raising eyebrows.
- There are still a few nonstandard insurers you can apply to. It may take a little longer to shop for an affordable policy but it isn’t all lost. Once you have a look at the list of companies you will see that a few of them are sizeable and reputable enough.
- You may still be able to get affordable quotes from some traditional insurers. That is why you should keep getting quotes from them, unless your case is pretty difficult, like just getting your license back after a DUI suspension.
- A high risk driver usually pays higher premium too. You can still save money but you need to have realistic expectations.
- You are not cast out forever. You can start getting good rates as soon as you are over your teenage years, improve on your driving record or credit score. You may see large premium increase just after an accident or a ticket. But you will see the rates are coming down only after a year of clean driving. This may be a good time to look for alternative quotes with a view to switch.
- The term nonstandard is also used to describe unusual risks like having a classic or highly modified auto. The specialist insurers that deal with such different risk types fall into this category too.
- On rare occasions you may be able to find the best coverage and price outside of traditional market, like in the case of specialist classic car insurers. There is nothing stopping a standard driver buying a policy from a nonstandard vehicle insurance company.
- Sometimes substandard insurers offer such a unique and valuable service that can leave their policyholders grateful. Some drivers like the ones with a foreign license may find that only handful of companies are willing to insure them and they feel lucky for it.
- Substandard auto policies may offer limited coverage and come with exclusions. For example, they may offer named driver insurance policies that only insure the drivers who are named on the policy and that is how they could achieve affordable prices. This may be a great solution for someone who couldn’t otherwise find an affordable policy due to a high risk driver in his/her household. As long as such policyholders know the limitations of their policy it may save the day. Otherwise, it could cause big problems for them.
- Nonstandard car insurance market is highly concentrated in Texas, California and Florida. But it is only a small portion of the market in other states.
Insurers are taking risks that are not statistically in their favor when they insure nonconforming drivers and therefore a nonstandard policy is usually considerably more expensive than a standard policy.
For many drivers substandard market is the only place they can find coverage. Others may have more options but find this market to be serving their needs better. It is all about understanding your circumstances and finding a policy that will meet your needs and budget.