Non-Standard Auto Insurance: A Lucrative Niche Market

Non-standard auto insurance is a category of insurance designed for drivers who are considered high-risk and more likely to get into accidents. These drivers are charged higher insurance rates to compensate for the increased risk of them making claims. Non-standard insurance typically comes with higher monthly premiums compared to standard policies. Drivers who are deemed high-risk may have a poor driving record, be inexperienced, or have a history of traffic violations. While non-standard insurance is more expensive, some drivers may benefit from lower premium rates when certain conditions are met.

Non-standard insurance is for drivers who are too risky for insurers to cover at standard rates

Drivers who fall into the non-standard category have a higher likelihood of filing claims due to accidents or traffic violations. This includes drivers with a history of accidents, speeding tickets, driving under the influence (DUI), or other factors that increase their risk profile. Non-standard insurance is also for drivers with little driving experience, a poor credit history, or lapses in insurance coverage.

The cost of non-standard insurance is typically higher than standard coverage, with premiums depending on the driver's state and the reason for requiring non-standard insurance. Age is a significant factor, with teenage drivers often paying more than those responsible for DUI-related accidents.

Non-standard insurance is offered by some major insurance companies, their non-standard subsidiaries, or specialist non-standard insurers. Examples of companies offering non-standard insurance include Acceptance Insurance, Direct Auto Insurance, and Gainsco Auto Insurance.

Non-standard insurance is more expensive than standard insurance

Non-standard insurance is for drivers who have a history of accidents, traffic violations, or other factors that an insurer considers to be higher risk. This includes drivers who have a suspended or revoked driver's license, have been convicted of a DUI, or have little driving experience.

Insurance companies typically break down their coverage into three risk tiers: preferred, standard, and non-standard. Drivers in the non-standard tier pay the highest rates because insurers believe there is a greater chance that they will need to pay for the costs of an accident or other damage.

The cost of non-standard insurance depends on the average premiums in a driver's state and the reason they require non-standard coverage. For example, a speeding violation will not raise rates as much as a DUI conviction. Age also influences rates, with teenage drivers often paying more than older drivers, even if the latter are guilty of a DUI-related accident.

While not all insurance companies offer non-standard insurance, some major companies do provide this type of coverage, including Geico, Progressive, State Farm, and Dairyland.

Non-standard insurance is for drivers with a history of accidents or traffic violations

Non-standard insurance is for drivers who are deemed too risky for insurance companies to cover at standard rates. This includes drivers with a history of accidents or traffic violations.

Insurance companies usually break their coverage into three risk tiers: preferred, standard, and non-standard. Drivers in the non-standard tier pay the highest rates. This is because insurance companies believe there is a greater likelihood that these drivers will file a claim due to an accident.

There are several reasons why a driver might be placed in the non-standard tier. This includes having multiple accidents or traffic violations on their record, or being convicted of driving under the influence (DUI). Other reasons include having little driving experience, poor credit, or a lapse in insurance coverage.

The cost of non-standard insurance depends on the average premiums in a driver's state and the reason they require non-standard coverage. For example, a speeding violation won't raise rates as much as a DUI. Age is also a factor, with teenage drivers often paying more than those guilty of a DUI-related accident.

Non-standard insurance is for drivers with poor credit

Non-standard insurance is a type of insurance for drivers who are considered high-risk. While non-standard insurance policies are essentially the same as standard ones, they come with more expensive premiums because the insurer has a greater risk of having to pay a claim.

Drivers with poor credit fall into the category of high-risk drivers. Insurance companies say there is a connection between credit history and the filing of claims. People who pay their bills on time tend to file fewer and less costly claims than those with a lot of late payments or delinquencies. Thus, drivers with poor credit are more likely to file a claim and will have to pay more for their insurance.

In addition to poor credit, there are several other factors that can cause a driver to be considered high-risk and require non-standard insurance. These include:

• Being a new or inexperienced driver (often someone under 25)
• Being an elderly driver
• Holding a foreign driver's license
• Having a history of accidents, speeding tickets, driving under the influence, or other moving violations
• Driving a high-performance, custom-built, or high-value vehicle
• Living in a neighbourhood with high rates of theft or vandalism
• Having a gap in your auto insurance history
• Buying only the minimum liability insurance required in your state

If you are a high-risk driver, you may be able to obtain non-standard insurance from small companies that specialize in it or from larger, well-known insurance companies.

Non-standard insurance is for drivers with a lapse in coverage

Non-standard insurance is a type of insurance for drivers who are considered high-risk. This includes drivers with multiple moving violations, accidents, or a lapse in coverage on their record. A lapse in coverage occurs when a driver neglects to pay their premiums, when their insurer cancels their policy, or when they are switching between policies and cancel their existing cover before their new policy goes into effect. This gap in coverage can result in higher rates as insurers may classify these drivers as high-risk.

The consequences of a lapse in coverage depend on its length and the specific insurance company. For example, a weeklong lapse in coverage can increase insurance rates by 11% or about $226 a year, while a 30-day lapse can lead to a 14% increase or about $269 a year. A lapse of over 30 days can result in a significant increase of 22%, or about $439 more a year. In some states, a lapse of over 30 days can lead to even higher increases, ranging from 20% to 46%.

In addition to higher rates, a lapse in coverage can also lead to other consequences. Some insurance companies may decline to reissue the policy after a lapse, forcing the driver to find a new policy with a different carrier. The lapse will be reported to the DMV, and the driver may be required to file an SR-22 form, which not all insurers accept. As a result, drivers may need to turn to non-standard or high-risk insurance companies, which typically charge higher rates and offer limited coverage options.

To avoid a lapse in coverage, it is important to maintain continuous auto coverage and communicate any changes in your situation to your insurer. If you are unable to make your insurance payment, it is recommended to contact your insurer immediately and explore alternative options, such as setting up a payment plan or reducing your coverage.

Frequently asked questions