Paul Sanchez
Being designated as a high-risk driver can have serious consequences, including higher insurance premiums and a more limited choice of carriers. While the exact definition of a high-risk driver varies by state and insurance company, it generally refers to drivers with a history of accidents, speeding tickets, or serious violations such as DUIs. In some states, accumulating a certain number of points on your license through violations can lead to license suspension or revocation. Insurance companies use their own points systems to determine how much of a risk a driver poses and calculate rates accordingly. Minor traffic violations like speeding tickets usually stay on a driving record for 3 years, while major violations like DUIs can remain for up to 10 years. High-risk drivers can take steps to improve their situation, such as taking defensive driving courses and improving their credit score.
| Characteristics | Values |
|---|---|
| Number of points | The threshold for rate increases is usually two or four points. |
| Types of violations | Reckless driving, speeding, DUI, DWI, and drag racing. |
| Impact on insurance rates | Insurance rates can increase by up to 44% for four points on a driver's license. |
| License suspension | Many states may suspend or revoke your license after accumulating six points. California could suspend your license after getting four points in one year. |
| High-risk insurance | High-risk insurance, also called "non-standard insurance," is more expensive and is often required for high-risk drivers. |
| SR-22 form | An SR-22 form is required for drivers convicted of serious violations, such as DUI or reckless driving, to reinstate their driving privileges. |
| Age | Teen and senior drivers are considered high-risk due to their age. |
| Driving experience | Adults with little or no history as an active driver are considered high-risk. |
| Credit score | Drivers with a low credit score or no credit history are considered high-risk. |
| Insurance history | New drivers or those with gaps in insurance coverage are considered high-risk until they establish a history. |
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What You'll Learn
The number of points needed varies by state and insurer
The number of points needed for a driver to be considered high-risk varies by state and insurer. While some states do not implement a license point system, others, like California, have one of the stricter points systems in the country. California could suspend your license after getting four points in one year. Considering that one at-fault crash may cost you three points for driver negligence, your license could be suspended after a second accident or ticket.
In most states, insurers get to independently determine how much to increase rates after a driver is convicted of a traffic violation. The one exception is North Carolina, which has the Safe Driver Incentive Plan (SDIP) where points on your license increase your insurance rates at a set amount determined by the state.
In some cases, three points on a driver's license can increase car insurance rates by up to 23%, or $658 per year, based on an analysis of multiple violations in Florida. In the same state, four points on a driver's license can increase car insurance rates by as much as 44%, or $1,281 per year.
The threshold for rate increases is usually two or four points, and the more points accumulated, the higher the insurance rates. For example, State Farm's insurance quotes for drivers with four points on their licenses are 39% less than average.
The number of points also depends on the type of violation. Minor incidents, such as failing to signal, are worth relatively few points, while more serious infractions like drag racing will add significantly more points.
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Points are assigned based on the severity of the violation
The number of points assigned to a driver's record depends on the severity of the violation. The more severe the violation, the higher the number of points. For example, a speeding ticket may result in a 22% increase in insurance rates, whereas an at-fault accident can increase rates by about 45%. A DUI conviction is considered a serious violation and can lead to a 65% increase in insurance rates. Other violations that are considered high-risk include reckless driving, driving uninsured, and having poor credit.
The CSA (Commercial Vehicle Safety Alliance) uses a points system to determine the severity of violations for trucking companies and commercial drivers. The system ranges from 1 to 10, with 10 being the most severe. For example, a violation related to the transportation of hazardous materials is considered very severe and can result in a high number of points. The time since the violation also plays a factor, with newer violations receiving a higher weight.
Insurance companies typically look at a driver's record for the past three to five years when determining rates. However, states may keep records for longer, and certain violations, such as intoxicated driving in New York, can remain on a driver's record permanently. The accumulation of points can result in a driver being designated as high-risk, which leads to higher insurance rates.
It is important to note that insurance carriers and the DMV may have different criteria for designating a driver as high-risk, and the duration for which a driver is considered high-risk may vary. High-risk drivers can explore options to reduce their insurance rates, such as taking defensive driving courses, improving their credit score, or comparing quotes from multiple insurance companies.
While the specific point values for violations may vary by state and insurance company, the general principle is that points are assigned based on the severity of the violation, and a higher number of points results in higher insurance rates and a potential designation as a high-risk driver.
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High-risk insurance is more expensive
The factors that determine whether a driver is high-risk are varied, and different insurers may have different criteria. Generally, drivers with multiple tickets, accidents, or a combination of both are considered high-risk. Drivers with a serious violation, like a DUI, reckless driving, or driving without insurance, are also often deemed high-risk. Some insurers also classify those with poor credit histories, driving sports cars, or with little or no driving experience as high-risk.
The cost of high-risk insurance can vary widely depending on the insurer, location, and reason for being deemed high-risk. For example, a speeding ticket can increase rates by 22%, an at-fault accident can increase rates by about 45%DUI can lead to a 65% increase. The cost of high-risk insurance can also depend on the driver's age, with teens and seniors often considered high-risk.
There are ways to reduce the cost of high-risk insurance. For example, taking an approved defensive driving course can show insurers that you're taking steps to become a better driver and may result in a discount. Getting an auto policy from the same company that you take out home or renters insurance can also result in savings. Comparing quotes from several insurers can also help to reduce costs, as some companies specialize in high-risk drivers and offer more competitive rates.
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High-risk drivers may have limited carrier options
While the criteria for designating someone as a high-risk driver vary among insurance carriers, several factors are commonly used to identify high-risk drivers. These factors include multiple accidents, multiple speeding tickets, reckless driving, driving without insurance, and driving under the influence (DUI).
High-risk drivers often face limited carrier options and higher insurance premiums. Insurance companies view high-risk drivers as more likely to file a claim, leading to increased financial exposure for the insurer. As a result, some carriers may opt not to renew coverage for high-risk drivers, while others may continue providing insurance but at significantly higher rates.
The limited options for high-risk drivers can make finding insurance coverage challenging. Some insurance companies specialize in providing coverage for high-risk drivers, such as First Acceptance and Dairyland. Non-standard carriers that cater to high-risk customers may also be an option, although they may have poorer reviews and fewer perks.
To find the most suitable carrier, high-risk drivers should research and compare quotes from multiple providers. Working with an independent insurance broker can help identify coverage options tailored to specific high-risk rating factors. Additionally, improving one's driving record over time by avoiding tickets and accidents can help transition from high-risk to standard coverage.
While high-risk auto insurance can be costly, there are ways to mitigate expenses. Comparing rates from different carriers and maintaining a good credit score can help lower insurance premiums. Taking an approved defensive driving course can also demonstrate a commitment to improving driving skills, potentially resulting in discounted rates.
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Ways to save on high-risk insurance
The criteria for being a high-risk driver vary among insurance companies and states. However, a driver is generally considered high-risk if they have multiple tickets, accidents, or major violations, such as DUIs, on their record. Other factors that may contribute to a driver being deemed high-risk include their age, credit score, and location.
- Shop around and compare prices: Get quotes from multiple insurance providers and compare their rates, coverage options, and customer reviews. Some companies that consistently offer competitive rates for high-risk drivers include State Farm, GEICO, Erie, Progressive, USAA, and Auto Owners.
- Ask about discounts: Even high-risk drivers may qualify for certain discounts. For example, GEICO offers 16 discounts and add-ons, including roadside assistance and rental car reimbursement. Progressive offers a Deductible Savings Bank, which deducts $50 each policy period you go without a claim. First Acceptance offers 18 discounts, including reductions for going paperless and getting a quote before your current policy expires.
- Adjust your coverage limits and deductible: While full coverage is recommended for most drivers, you may opt for minimum liability coverage to lower your premiums. Keep in mind that this increases your financial risk in the event of an accident. Similarly, raising your deductible can lower your monthly payments, but you will pay more out of pocket when filing a claim.
- Choose an older, cheaper vehicle: New vehicles, especially sports cars, tend to cost more to insure. Opting for an older vehicle can help reduce your insurance costs.
- Improve your credit score: In most states, your credit-based insurance score is used to determine your insurance rates. Paying your bills in full, limiting credit card applications, and reducing debt can help improve your credit score and lower your insurance premiums.
- Take a defensive driving course: Completing an approved defensive driving course demonstrates to insurers that you're taking steps to improve your driving, which may result in a discount.
- Bundle your insurance policies: Combining your auto insurance with home or renters insurance from the same company can often lead to significant savings.
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Frequently asked questions
A high-risk driver is someone with a poor driving record, little driving history, or a vehicle considered more likely to get into accidents by insurance providers. This includes drivers with multiple accidents, tickets, or major violations such as DUIs on their record. Teen drivers and adults with little history as an active driver are also considered high-risk.
Insurance companies use a points system to determine how much of a risk a driver poses and then calculate rates accordingly. The number of points assigned is proportional to the severity of the traffic violation. Minor incidents, such as failing to signal, are worth relatively few points, while more serious infractions like drag racing will result in significantly more points.
The increase in insurance rates for high-risk drivers varies depending on the company, state, and violation. For example, in California, disobeying a traffic control signal caused rates to increase by 20.2%, while speeding resulted in a 25.6% rate increase, despite each violation being worth one point. A single at-fault accident can increase rates by about 45%, while a DUI could lead to a 65% increase.
The duration of the high-risk designation depends on the insurance company and state regulations. Insurance companies typically look back at a driver's record for the past three to five years, but this "look-back" period can be longer or shorter depending on the state. For example, Massachusetts allows insurance companies to look back at ten years of driving records. Accumulated points from traffic tickets and moving violations will eventually fall off a driver's record, but this may take several years.
