High-Risk Auto Insurance: Finding The Cheapest Policies

High-risk car insurance is more expensive than standard car insurance, as drivers with a history of accidents, speeding tickets, or other infractions are more likely to file claims. Factors such as age, location, credit score, and vehicle type can also influence whether someone is considered a high-risk driver. While some insurance companies may deny coverage to high-risk drivers, others offer specialised high-risk insurance plans, albeit at higher rates. The cheapest high-risk auto insurance companies include GEICO, State Farm, and USAA.

How to save on high-risk auto insurance

High-risk auto insurance is often more expensive than standard car insurance, but there are ways to save money on your premium. Here are some tips on how to reduce the cost of high-risk auto insurance:

• Shop around and compare quotes: This is one of the most effective ways to save money on auto insurance. Different insurance companies will rate and charge you differently for your violations. By comparing quotes from multiple insurers, you can find the best rate for your specific situation.
• Improve your driving record: Most driving record infractions will affect your insurance rates for three to five years. However, if you avoid additional tickets and accidents, your rates will likely decrease over time.
• Take a defensive driving course: Many insurance companies offer discounts to drivers who complete a defensive driving or driver improvement course. These courses can help you improve your driving skills and reduce your risk of accidents and violations.
• Improve your credit score: Insurance companies often use credit scores to determine insurance premiums. A higher credit score can help you qualify for lower car insurance rates. Improving your credit score can save you a significant amount on your premium.
• Bundle your insurance policies: Consider bundling your auto insurance with other types of insurance, such as renters, home, or life insurance. Many insurance companies offer discounts when you have multiple policies with them.
• Explore discounts: Insurance companies offer a variety of discounts that can help lower your premium. Look for discounts such as good student discounts, vehicle safety feature discounts, low mileage discounts, and more.
• Enroll in a telematics program: Some insurance companies offer telematics programs that track your driving habits in real time. If you drive safely and log low mileage, you may be eligible for additional discounts.

High-risk insurance factors

Several factors can contribute to a driver being deemed high-risk by insurance companies. Here are some of the most common factors:

Driving-Related Factors:

• Age and Experience: Younger and less experienced drivers, especially teenagers, are often considered high-risk due to their lack of driving experience and higher accident rates. Insurance companies view teen drivers as very risky and potentially expensive clients to insure. Data shows that teen drivers drive more recklessly and get into more accidents than any other age group.
• Accidents and Violations: Multiple accidents, violations, or a combination of both can result in a high-risk classification. This includes at-fault accidents, speeding tickets, reckless driving, and driving under the influence (DUI). These incidents indicate a higher likelihood of filing insurance claims.
• Lapse in Insurance Coverage: A gap or lapse in auto insurance coverage is seen as a red flag. Continuous coverage demonstrates financial responsibility, and insurers may offer lower rates to drivers with uninterrupted insurance histories.

Non-Driving Factors:

• Credit Score: Drivers with poor credit scores are often considered high-risk. Insurance companies assume a correlation between poor credit handling and an increased number of insurance claims. Poor credit history can make finding affordable insurance challenging, and those with low credit scores typically pay higher premiums.
• Location and Demographics: Your location, including state and ZIP code, can impact insurance rates. Certain states, such as no-fault states like Michigan, have higher insurance requirements and more expensive coverage. Additionally, insurance rates may vary based on population density, with higher rates in urban areas.
• Vehicle Type: The type of vehicle you drive can also affect your insurance rates. High-performance or sports cars may be considered higher risk due to the potential for riskier driving behaviors and more expensive repairs. On the other hand, vehicles with strong safety features may be cheaper to insure.

How to get car insurance if you've been denied coverage

If you've been denied car insurance coverage, there are several steps you can take to find an insurer. Here are some options to explore:

Shop around for quotes from different insurers:

Not all insurance companies use the same criteria to evaluate applications, so it's worth applying to multiple insurers to see if you can get a quote. Working with an insurance agent can also be helpful, as they can submit your application to several companies at once. Remember that criteria may change over time, so it's a good idea to check back with insurers periodically.

Consider a high-risk insurance company:

If you've been denied coverage by standard insurance companies, you may need to turn to a high-risk or non-standard insurer. These companies specialise in providing insurance to drivers with poor driving histories, but their rates are typically higher. Examples of such companies include The General, Safe Auto, and National General.

Join a state-assigned risk pool:

If multiple insurers have denied you coverage, you may need to join a state-assigned risk pool. Auto insurers participate voluntarily in these pools, and each insurer must accept the motorists assigned to them by the state. While the premiums are substantially higher, these pools provide coverage regardless of the driver's history. Contact your insurance professional or state insurance department to find the assigned risk pool in your state.

Get added to a family member's or roommate's policy:

You can also consider adding yourself to the policy of someone you live with, such as a family member or roommate. However, this option requires trust, as you'll both be responsible for each other's driving behaviour.

Improve your risk profile:

In the long term, you can work on improving your risk profile to increase your chances of getting coverage and lower your insurance rates. Here are some ways to do this:

• Improve your driving record: Take a defensive driving course to reduce the number of points or infractions on your license, and consider having older speeding tickets removed or expunged from your record if possible. Drive safely, obey traffic laws, and avoid accidents and violations.
• Improve your credit score: Pay your bills on time, dispute errors, and reduce your credit utilisation ratio by paying off debt. A better credit score can lead to lower insurance rates.
• Choose a safer car: Insuring a fast, expensive, or high-performance car can be challenging. Opting for a safer, more sensible vehicle can help reduce your insurance costs.
• Address other factors: Consider your location, age, and insurance history. Moving to an area with lower theft and vandalism rates, choosing a safer vehicle, and maintaining continuous insurance coverage can all positively impact your insurance eligibility.

What is the best insurance for high-risk drivers?

High-risk drivers are often charged higher insurance rates and have fewer insurance companies to choose from. Factors that can make you a high-risk driver include a history of at-fault accidents, speeding tickets, or other infractions. Non-driving factors such as age, location, and credit history can also contribute to a driver being labelled high-risk.

USAA, State Farm, and American Family Insurance are some of the best major car insurance companies for high-risk drivers. While these companies will raise premiums after an accident or violation, the rate hikes tend to be smaller than those of other insurance companies. GEICO is another good option, with average rates that are 36% less expensive than other companies.

High-risk drivers can also consider non-standard insurance companies, which specialize in offering coverage to people who are having trouble getting a quote from another company. Some non-standard insurance companies include The General, Safe Auto, and National General. However, non-standard companies tend to have higher prices and worse customer service than typical insurers.

To get the best insurance rates as a high-risk driver, it is recommended to get quotes from several major auto insurance companies before switching to a non-standard insurer. Comparing quotes from multiple companies can help high-risk drivers find the most affordable and suitable coverage for their specific situation.

How to get car insurance if you've been denied coverage

If you've been denied car insurance, there are several steps you can take to ensure you get coverage. Firstly, it's important to understand why your application was denied. Car insurance companies are more likely to deny insurance to applicants they deem high-risk, including those with a history of accidents, multiple traffic tickets, serious infractions such as DUIs, or a combination of these factors. Other reasons for denial include age, credit score, type of car, and location.

Shop Around for Quotes

If you've been denied coverage, try applying for quotes from several other insurance companies. Different insurers evaluate applications differently, so you may find that another company is willing to offer you a policy. It's also worth checking back with insurers every six to twelve months, especially if you've improved your driving record, as criteria can change over time.

Find a Specialist Insurer

If you've tried multiple companies with no luck, seek out insurers who specialise in covering high-risk drivers. These are known as non-standard insurers, and while their rates tend to be higher, they may be your best option for getting covered. Examples of such companies include The General, Safe Auto, and National General.

State-Sponsored Insurance Plans

Another option is to look into state-sponsored auto insurance plans. These are available in many states and offer coverage to drivers who are unable to obtain it through standard insurance companies. However, these plans also tend to charge higher rates.

Get Added to an Existing Policy

If you're a new or inexperienced driver, another option is to get added to a family member's or roommate's policy. This is usually only possible if you share the same address or are a direct family member living elsewhere.

Improve Your Risk Profile

Finally, consider taking steps to lower your risk profile. This could include improving your driving record by taking a defensive driving course, avoiding further accidents and violations, and improving your credit score. You could also choose to buy a safer, more sensible car, or move to an area with lower rates of theft and vandalism.

Frequently asked questions