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What is high risk auto insurance? How can a car insurance company classify you as high risk?
While there are obvious reasons why you could be considered a high risk driver like a prior DUI conviction, a long history of car accidents or a driving related crime, for many people falling into the high risk category can often be unexpected. Car insurance premiums are based on “the risk of you filing a future claim”. This could mean filing a claim for a total loss accident or just a fender bender but whenever you pose any risk of filing a claim car insurance companies will adjust their premiums accordingly.
All insurance providers have different levels of acceptable risk so you may be denied coverage by one and accepted by another. In fact it’s not uncommon for some drivers to obtain a good driver discount with one provider and ineligible somewhere else.
What are some reasons why a driver is considered high risk?
There are many variables used to measure risk. While some are very obvious others may not be, especially to drivers unfamiliar with the car insurance industry. Some of the most common things auto insurance companies consider high risk are:
SR-22 Form Filing Requirement
This is probably the biggest red flag for car insurance companies and many do not offer SR-22 insurance. Since an SR-22 form can only be filed by an authorized insurance agency many have simply opted not to offer filing these forms and therefore do not have the policy option you need to obtain coverage. An SR-22 form is a financial responsibility form the court orders drivers who have been involved in high risk driving activities to file in order to re-instate driving privileges. Reasons for a SR-22 filing requirement could include driving under the influence, at-fault in a car accident while operating the vehicle with no insurance and many other reasons.
DUI or DWI conviction
Obviously you are high risk with a DUI or DWI conviction under your belt. Would you insure someone who drives under the influence? You can bet the same answer from most insurance companies. Auto insurance with a DUI is possible but most of the typical car insurance companies do not offer coverage and you need to seek an insurance provider like the General Auto Insurance Company who provides specialized coverage.
Speeding Tickets / Moving Violations
While a single speeding ticket may not affect your car insurance rates with many auto insurance companies any record of excessive speeding, reckless driving and other moving violations will put you in the high risk category. Even a couple speeding tickets in the recent past can cause you to be ineligible for the good driver discount which is sometimes the biggest discount available. You probably will not get denied insurance with a couple speeding tickets but you certainly won’t get preferred rates either.
A bad credit score is the kiss of death in America for most people and car insurance companies use your credit score to measure risk. Studies have shown that applicants with poor credit scores often are more likely to file a claim hence any applicant with bad credit is higher risk. Some auto insurers simply look at your credit score while others view your overall credit profile but with poor credit you certainly should expect some car insurance companies to charge higher premiums or even deny coverage.
Prior Claims History
Filing a claim is exactly why you have auto insurance however its also a good reason for a car insurance company to classify you as higher risk than drivers who never file a claim. It certainly is a catch 22 – on one hand you want to file a claim, on the other you don’t want to be penalized for it. Your prior claim history is something many insurers look at but how it affects your premiums really depends on what your prior claims were for and the frequency of such claims.
No auto insurance company likes drivers who were previously uninsured. The amount of time can vary but for many providers any driver who has been uninsured for the prior six month period is considered high risk. Some even go as far as classifying you in the same category as a young driver. Always try to maintain a car insurance policy in-force.
Prior Insurance Cancelled for Non-Payment
Never let a car insurance company cancel you for non-payment as many auto insurers will not want to do business with you in the future or penalize you with high premiums.
Young, full of energy and you know everything right? Your charm will not work with auto insurance companies. Auto insurance for young drivers under the age of 25 is considered high risk and your premiums will certainly show it.
New drivers over the age of 25 are also riskier to insure. Generally a car insurance company wants to see at least 3-5 years of experience in order to fall in the preferred category of drivers so even if you wait to get licensed later in life there are still higher premiums to pay.
Exotic and Custom Vehicles
The type of vehicle is a big part of calculating risk and if you happen to own an exotic car, modified car or even some of the finest luxury vehicles its possible to have limited choices of coverage and very expensive premiums. Even if you can afford a Bentley always speak with your car insurance company first about whether or not they will insure you.
Who offers high risk car insurance?
High risk car insurance is offered by many providers with the most notable being the General Auto Insurance Company. Many of the top 10 auto insurance companies offer some level of high risk insurance but it really depends on your profile. Some insurers are very conservative while others have more leniency. If you happen to continually get denied coverage in the voluntary market all states have programs or plans where they can assist you in obtaining car insurance.
How much is high risk auto insurance?
Auto insurance for high risk drivers can be expensive but premiums entirely depend on your profile. Average car insurance rates run around $1,500 annually for typical good drivers but high risk drivers could see the same or 2 or 3 times this amount. It all depends on the provider and the details of your application. A person with 4 DUI convictions obviously is going to pay more than someone who just has a low credit score.
High risk insurance is obtainable but can be very expensive so you need to shop around and compare as many quotes as you can to find the most affordable coverage.
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