Insurers: High-Risk Drivers Need Coverage Too

Auto insurance companies are not required to insure high-risk drivers. However, there are some companies that specialise in providing insurance for high-risk drivers, such as GEICO, Nationwide, and State Farm. High-risk drivers are typically charged much higher premiums than low-risk drivers, as they are considered more likely to file insurance claims.

High-risk driver insurance cost breakdown by reason

High-risk drivers are considered more likely to file insurance claims than typical drivers. Insurance companies look at your driving record, financial history, and insurance history to determine how risky it would be to insure you. If you are deemed a high-risk driver, you will likely pay higher premiums than low-risk drivers. Here is a breakdown of how certain factors can affect your insurance rates as a high-risk driver:

DUI/DWI Conviction

A DUI or DWI conviction is one of the biggest factors that can designate a driver as high-risk. This can significantly increase your car insurance premium. The increase in premium depends on the company and the state you live in. For example, the average full-coverage premium after a DUI or DWI is $2,293 with State Farm and $2,313 with USAA.

Accidents

Having at-fault accidents on your record will also increase your insurance rates. On average, one accident can increase your auto insurance premium by almost 50%. The more accidents you have, the higher your premium will be. For example, the average full-coverage premium after an at-fault accident is $1,769 with State Farm and $1,742 with USAA.

Speeding Tickets

Speeding tickets are another common reason for high-risk designation. Each speeding ticket will increase your premium, with the amount of increase depending on how much you exceeded the speed limit. For example, the average full-coverage premium after one speeding ticket is $1,606 with State Farm and $1,464 with USAA.

Reckless Driving Conviction

A reckless driving conviction, similar to a DUI, will significantly increase your insurance rates. This type of conviction indicates a higher level of risk to insurance companies.

Multiple Moving Violations

Multiple moving violations, such as running red lights or making improper turns, will also lead to higher insurance rates. These violations indicate a pattern of risky driving behaviour.

Poor Credit History

Having a poor credit history is another factor that insurance companies consider when determining high-risk status. Studies have shown a link between poor credit and risky driving behaviour, so insurance companies will often charge higher rates to those with poor credit.

Lapses in Insurance Coverage

If you have had lapses in insurance coverage, such as cancelling your policy or not paying your bill, insurance companies will view this as a negative factor. This indicates financial unreliability and can result in higher insurance rates.

New or Inexperienced Driver

Teen drivers and other inexperienced drivers are often considered high-risk due to their lack of driving experience. Research has shown that young drivers are more likely to engage in risky driving behaviour and get into accidents, so insurance companies charge higher rates to compensate for the increased risk.

High-risk insurance is often expensive, but there are several ways to cut the cost

• Shop around for quotes: Compare quotes from multiple insurance companies, including standard and non-standard insurers. The cheapest company for one high-risk driver may not be the cheapest for another, so it's important to get a range of quotes to find the best deal.
• Increase your deductible: Opting for a higher deductible can lower your premium significantly. For example, increasing your deductible from $200 to $500 could reduce your coverage cost by 15-30%. Just ensure you have enough money set aside to pay the higher deductible if needed.
• Improve your credit score: In most states, insurance companies use credit scores to determine insurance rates. By improving your credit score, you may be able to get a lower insurance rate.
• Take a defensive driving course: Many insurance companies offer discounts to drivers who complete an approved defensive driving course. This can also help reduce the number of points on your license.
• Bundle your insurance policies: Buying multiple types of insurance from the same company, such as homeowners and auto insurance, can often lead to a discount.
• Seek out other discounts: Ask the insurance company about all available discounts, such as good student discounts, low mileage discounts, or discounts for being a loyal customer.
• Improve your driving record: Driving cautiously and avoiding accidents or violations will help you build a clean driving record over time, which can lead to lower insurance rates.
• Choose a lower-risk vehicle: Some vehicles are considered higher risk than others, such as high-powered sports cars. Opting for a lower-risk vehicle may help reduce your insurance costs.
• Raise your deductible: In addition to saving on your premium, a higher deductible can also reduce your insurance costs by lowering your overall spending if you avoid making small claims.
• Review your coverage: Consider dropping certain types of coverage that you may not need, such as collision or comprehensive coverage for an older vehicle.
• Switch to pay-as-you-go insurance: If you're a safe, low-mileage driver, consider a usage-based insurance program that charges you based on how much you drive.
• Choose a reputable company: While cost is important, it's also crucial to choose a financially stable company with a good reputation for customer service.

While high-risk insurance can be expensive, implementing these strategies can help reduce the financial burden. It's important to remember that the availability and impact of these strategies may vary depending on your specific situation and location.

How long are you considered a high-risk driver?

The length of time a driver is considered high-risk depends on the insurance company and the state they live in. Typically, this period lasts between three and ten years. However, some insurers and states may look back as far as five years into a driver's history. Most minor traffic violations, such as speeding tickets or single-car accidents, remain on a driving record for three years, while major violations like DUIs tend to stay on record for five to ten years.

New drivers without insurance or those with lapses in coverage are often only considered high-risk for the first term of their insurance policy, typically six months, as they can take steps to improve their record or gain driving experience. Teen drivers are also considered high-risk until they gain more experience.

High-risk drivers may face challenges in obtaining affordable insurance, but improvements in driving behaviour and time can lead to reduced premiums over the long term.

How to get cheap car insurance with a bad driving record

While it is challenging to find cheap car insurance with a bad driving record, it is not impossible. Here are some tips to help you get started:

• Comparison shop: Compare quotes from both standard and non-standard insurance companies. Ensure that you are comparing quotes for the same coverage amounts to get an accurate picture.
• Look closely at rates: Understand why you are considered high-risk and how that affects your rates. The cheapest company for you might vary depending on your specific circumstances.
• Ask about discounts: Ask about the discounts you qualify for, such as safe driver, good student, or low mileage discounts. Remember that discounts vary by company.
• Shop frequently: Insurers might change their rates from time to time, so it's a good idea to comparison shop for high-risk car insurance every six months or so.
• Improve your credit score: Insurers consider drivers with poor credit to be riskier and charge them higher rates. Improving your credit score can help lower your insurance premiums.
• Take a defensive driving course: Completing an approved course can show insurers that you're committed to becoming a safer driver and may result in a discount.
• Raise your deductible: A higher deductible can help keep your insurance premium low, but make sure you can afford to pay more out-of-pocket in the event of an accident.
• Bundle your insurance policies: Combining your auto insurance with another policy, such as homeowners or renters insurance, can help lower your rates.
• Improve your driving record: Over time, working to improve your driving record will pay off. Avoiding further infractions and demonstrating safe driving habits can help reduce the impact of past violations on your insurance rates.
• State Farm
• Progressive
• The General
• USAA (for military members, veterans, and their families)
• American Family
• Nationwide

What is a high-risk driver?

A high-risk driver is someone who insurance companies consider more likely to file insurance claims than a typical driver. Insurers look at a driver's history to determine how risky they would be to insure and how much to charge for coverage. Factors that may lead to a driver being classified as high-risk include:

• A DUI (Driving Under the Influence) or DWI (Driving While Intoxicated) conviction
• A reckless driving conviction
• Multiple speeding tickets or other moving violations
• Multiple at-fault accidents
• Lapses in insurance coverage
• Poor credit scores
• Inexperience or newness to driving

It's important to note that the definition of a high-risk driver can vary between insurers, and there is no legal designation for this term. The factors used to classify drivers as high-risk differ across companies.

High-risk drivers typically pay more for car insurance because insurers view them as greater liabilities and more likely to make late or missed payments. The presence of multiple risk factors increases the likelihood of being classified as high-risk and results in higher insurance premiums.

Frequently asked questions