Many motorists don’t fit in the usual rate structure because of their history, age, credit score, licenses and many other reasons. That is why most traditional insurers deny coverage or quote very high premiums for these nonconforming applicants. As the market gets competitive, good drivers get cheaper prices and perilous ones are denied of typical rates. Also, larger ones get choosy about the types of exposures they accept. That is why people start looking for new sources and non standard automobile insurance companies step in to fill this void.
Who Are Considered As Non Standard Drivers?
Lately, more and more people are considered high risk by large numbers of carriers. Having too many tickets and accidents, being young and having an unusual or unflattering license and bad credit are some of the reasons why you may be included in this unflattering classification. Also, having a salvaged or sports car can push otherwise an ordinary person in.
These types of risks are denied by standard auto insurers for being too dangerous or just not fitting in usual criteria, like having a foreign driver license or unusual classic car.
Some less desirable motorists like teenagers may still find cover from the usual companies even though they may have to pay high premiums. And most reputable names will refuse problematic applicants like the ones with recent license suspension due to too many traffic violations or one severe incident like DUI. Actually, people don’t need to do much to fall into this class in some cases. Just wanting a basic state minimum may be enough to put off some of them, as a few of them are not offering these basics. They are just not keen on such desperate applicants who probably don’t appreciate the provisions.
Non Standard Car Insurance Companies
When many motorists are turned down by typical market participants they are forced to look outside the box to find alternatives that meet their needs. Having limited choices can put people between a rock and a hard place. A few carriers may want to take advantage of the position applicants are in by charging expensive prices.
Sometimes, making a choice under such circumstances may be a case of finding the lesser evil. In any case, you may have to face the music since you need coverage to drive. What you should remember is that this may be a temporary situation if you can correct the problems that made you an undesirable policyholder. Then, you may be able to switch after a short period of time and save money again, providing you don’t get into trouble in that time.
Saying that a few decent even some of the largest vehicle insurance carriers offer high-risk policies through subsidiaries. So, it may not be as bad as it sounds. You can try to reduce the costs by shopping harder for lower quotes.
Being labeled hazardous makes it expensive to buy a policy. However, you may still have wide range of options. And you can still choose even though number of choices may be limited. You are not as hopeless as someone who cannot find anything and has to look to state authorities for an assigned risk plans.
Things to Know about Nonstandard Automobile Insurance
Like most things in life, there are a few tricks to buying coverage in this market too. Knowing them will help you navigate the narrow streets. Here are a few of them.
- Lapse, lack of consistent or unbroken history, cancelled policies due to non-payment are some of the few things that can make you undesirable. So, you should try to keep a steady history and avoid raising eyebrows.
- There are still a few of them you can apply to. It may take a little longer to shop for an affordable quote but it isn’t all lost. Once you have a look at the list 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 companies. That is why you should keep getting quotes from them, unless the case is pretty difficult, like just getting your license back after a DUI suspension.
- Usually premiums are high. 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 teenage years, improve on your record or credit score. You may see large premium increase just after an accident or a ticket. But you will see the prices are coming down only after a year of no claim. This may be a good time to look for alternative quotes with a view to switch.
- The term is also used to describe unusual risks like having a classic or highly modified auto. And the specialists that deal with these niches 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 classic car specialists. There is nothing stopping a typical motorist searching quotes from high risk vehicle insurance companies.
- Sometimes substandard providers offer such a unique and valuable service that can leave policyholders grateful. Some like the ones with a foreign license may find that only handful of underwriters are willing to accept them and they feel lucky for it.
- High risk auto policies may offer limited coverage and come with exclusions. For example, they may offer named driver policies that only include the users who are listed and that is how they could achieve affordable prices. This may be a great solution for someone who couldn’t otherwise get it due to a perilous driver in his/her household. As long as they know the limitations it may save the day. Otherwise, it could cause big problems for them.
- The market is highly concentrated in Texas, California and Florida. But it is only a small portion in other states.
Underwriters are taking on perils that are not statistically in their favor when they cover nonconforming drivers and therefore they are usually considerably more expensive than typical ones.
For many, high-risk market is the only place they can find. Others may have more options but find this to be serving them better. It is all about being aware of circumstances and trying to get what you need within the budget.