Alyssa Lane
High-risk auto insurance is a type of car insurance policy for drivers who are deemed more likely to get into accidents and file claims than the average driver. Insurance companies consider several factors when determining whether a driver is high-risk, including age, driving record, credit score, and coverage history. High-risk drivers typically face higher insurance premiums and may have difficulty finding insurers willing to cover them. Common factors that contribute to a driver being classified as high-risk include multiple speeding tickets, DUI convictions, at-fault accidents, and lapses in insurance coverage.
| Characteristics | Values |
|---|---|
| What is high-risk auto insurance? | A type of auto insurance for drivers deemed more likely to get into accidents and file claims than the average driver. |
| Who needs it? | Drivers who are considered high-risk due to factors such as age, driving record, credit score, and lapses in coverage. |
| How is high-risk determined? | Insurance companies consider various factors, including age, driving record (e.g., accidents, speeding tickets, DUI/DWI convictions), credit score, and coverage history. |
| Cost implications | High-risk drivers typically pay higher insurance premiums due to the increased likelihood of filing a claim. |
| Impact on insurance options | High-risk drivers may have fewer insurance company options as some companies do not insure high-risk drivers or charge very high rates. |
| Strategies to reduce high-risk status | Improving driving record, taking defensive driving courses, improving credit score, and comparing quotes from multiple insurers. |
What You'll Learn
High-risk factors out of your control, like age or a lapse in coverage
There are several factors that can contribute to a driver being considered high-risk, and some of these factors are beyond the driver's control. Age, for example, is a significant factor. Young and inexperienced drivers, particularly those under 19 years of age, are considered high-risk as they are more prone to accidents. On the other hand, drivers over 65 years of age are also deemed high-risk due to increased chances of accidents and higher traffic fatalities within this age group.
Another factor that can influence high-risk status is a lapse in auto insurance coverage. If a driver has not maintained continuous car insurance coverage, they may be viewed as high-risk by insurers. This is true even if the lapse occurred during a period when the individual did not own a car, such as when living in a city with good public transportation.
While these factors are beyond an individual's immediate control, there are strategies to mitigate their impact. For younger drivers, maintaining a clean driving record and good grades can help lower premiums over time. Similarly, older drivers can benefit from safe driving practices and taking defensive driving courses to demonstrate their commitment to safety. For those with lapsed coverage, consistently safe driving and avoiding traffic violations can lead to reduced premiums over time.
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High-risk factors you can control, like driving violations or poor credit
High-risk auto insurance is a special type of policy reserved for drivers who are deemed more likely to cause an accident. While not all insurers offer this non-standard type of insurance, it is not impossible to find.
High-risk factors that you can control include driving violations and poor credit. Drivers with multiple infractions, such as speeding tickets, driving under the influence (DUI), or at-fault accidents in a short period, are often considered high risk. These violations indicate a pattern of risky behaviour and increase the likelihood of future accidents, making insurers consider these drivers a financial risk.
In most states, your credit history also plays a significant role in determining your insurance premium. Drivers with poor credit scores are statistically more likely to file insurance claims, and insurers consider them a greater risk. As a result, they often face higher insurance rates to offset this risk. For example, some agencies charge up to 69% more for individuals with poor credit scores, especially those below 600.
To lower your high-risk insurance costs, you can take several steps. Firstly, focus on improving your driving record by adopting safer driving habits, such as driving within speed limits and avoiding reckless driving. Secondly, consider taking a defensive driving or driver safety course, as these can help remove "points" from your record and may even lead to discounts on your insurance premium. Finally, shop around for insurance providers and compare quotes to find the best rates and coverage for your specific situation.
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How to get high-risk auto insurance
High-risk auto insurance is a special type of policy reserved for drivers who are deemed more likely to cause an accident. This includes inexperienced drivers, those with multiple traffic violations or at-fault accidents, and drivers with poor credit. If you fall into one of these categories, here are some steps you can take to obtain high-risk auto insurance:
- Shop around and compare quotes: High-risk auto insurance is not offered by every insurance company, and the rates can vary significantly between providers. It is important to get quotes from multiple insurers to find the best rates and coverage options for your specific situation.
- Consider a non-standard insurance company: If you are unable to obtain coverage from a mainstream insurance company, you may need to turn to a non-standard or high-risk auto insurance specialist. These companies tend to have higher prices and worse customer service, but they can provide an option for those who cannot get coverage elsewhere. Examples of national non-standard insurers include The General, Safe Auto, and National General.
- Look into state-sponsored auto insurance plans: Some states offer state-sponsored auto insurance programs that can provide an option for high-risk drivers who are unable to obtain coverage through traditional means. These plans tend to have higher rates, but they can be a last resort for those who cannot find coverage elsewhere.
- Improve your driving record: One of the best ways to lower your insurance rates as a high-risk driver is to improve your driving record. This may involve taking a defensive driving course, adopting safer driving habits, and avoiding traffic violations and accidents. Over time, as you demonstrate responsible driving behaviour, your premiums should decrease.
- Improve your credit score: Poor credit history can also contribute to high-risk status. By improving your credit score, you may be able to lower your insurance rates, as insurers may view you as less likely to file a claim.
- Consider usage-based insurance: If you drive infrequently, you may benefit from usage-based insurance, which charges you based on how much you actually drive. This can be a cost-effective option for high-risk drivers who do not need to be on the road often.
- Utilise telematics programs: Many insurance companies offer telematics programs that monitor your driving habits through your phone or a device plugged into your vehicle. These programs can provide discounts for safe driving behaviours, helping to offset the higher rates associated with high-risk status.
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How much you'll pay for high-risk auto insurance
The cost of high-risk auto insurance varies depending on several factors, including the driver's age, driving record, credit score, and location. High-risk drivers can expect to pay significantly more than the average annual auto insurance premium of $1,730 for full coverage. The increase in premiums can range from as little as 4% to as much as 165%.
- Age: Younger and older drivers are often considered high-risk due to their lack of experience or age-related factors affecting their driving abilities. Teen drivers typically face much higher premiums than older drivers.
- Driving Record: Multiple traffic violations, such as speeding tickets, DUI convictions, or at-fault accidents, will significantly increase insurance rates. For example, drivers with multiple DUIs on their record can expect to pay much more than those with minor infractions.
- Credit Score: In most states, insurance companies use credit history as a factor in determining rates. Drivers with poor credit scores are considered high-risk and will pay higher premiums.
- Location: Drivers in areas with high crime rates or extreme weather conditions may pay higher premiums due to the increased likelihood of claims.
Some insurance companies specialise in providing coverage for high-risk drivers and may offer more affordable rates. It is essential for high-risk drivers to shop around and compare quotes from multiple providers to find the best rates and coverage options.
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How to lower your high-risk insurance cost
High-risk auto insurance is a type of coverage that is required when an insurance company decides that you are more likely to get into an accident and file a claim than the average driver. This could be due to a range of factors, such as age, driving history, credit score, and more.
If you are deemed a high-risk driver, there are several steps you can take to lower your insurance costs:
Improve Your Driving Record
A good driving record is one of the best ways to keep insurance costs down. Follow all traffic laws and drive defensively to avoid accidents and violations. Going three years without a ticket or accident can result in significant discounts on your premium.
Take a Defensive Driving Course
Check with your insurance agent or company for approved defensive driving courses. Completing such a course can make you eligible for discounts on your premium.
Choose a Safer Car
Insurance companies also consider the safety features of your car when determining insurance costs. Trading in your car for a model with better safety features or a stronger safety record can help lower your premium.
Shop Around for Insurance
Compare prices from different insurance companies, as rates can vary significantly. Get at least three quotes to ensure you're getting the best deal.
Take Advantage of Discounts
Insurers offer various discounts based on driving history, vehicle features, and policy choices. For example, some insurers offer discounts for paperless billing, paying online, automated payments, or paying the entire policy upfront.
Improve Your Credit Score
In most states, insurance companies use credit information to price auto insurance policies. Improving your credit score can help lower your insurance premium over time.
Increase Your Deductible
Raising your deductible will lower your insurance costs substantially. However, be cautious not to set it too high, as you don't want to be faced with paying more than you can afford out of pocket in the event of an accident.
Reduce Coverage on Older Cars
If you have an older car that isn't worth much, consider dropping collision and comprehensive coverage. Ensure that you still comply with your state's insurance laws and any coverage requirements from your lender.
Buy Home and Auto Insurance Together
Many insurance companies offer discounts if you bundle your home and auto insurance policies with them.
Remember, even if you are currently considered a high-risk driver, you can take steps to improve your driving record and lower your insurance costs over time.
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Frequently asked questions
High-risk auto insurance is a type of car insurance policy for drivers who are deemed more likely to get into an accident and file a claim than the average driver. This could be due to a variety of factors, such as age, driving record, credit score, or a lapse in insurance coverage.
Insurance companies consider various factors when determining if someone is a high-risk driver. These factors include age, driving record, credit score, and lapses in insurance coverage. For example, drivers who are younger or older than a certain age range, have multiple traffic violations or accidents, or have a poor credit history may be considered high-risk.
High-risk drivers typically face higher insurance premiums and may have fewer insurance company options, as some companies may refuse to provide coverage to high-risk drivers. It may also be more difficult for high-risk drivers to find low-cost insurance coverage.
High-risk drivers can take several steps to reduce their insurance costs, such as improving their driving record by avoiding tickets and accidents, taking a defensive driving course, improving their credit score, or comparing quotes from multiple insurance companies to find the most affordable option.
