What is High Risk Auto Insurance

Auto insurance can be a world of complexities, and you may have a hard time wrapping your hands around the various concepts that make up the field of endeavor. In this article, I have decided to acquaint you with what is high risk auto insurance? If you have applied for auto insurance recently or come across the term high risk auto insurance, this article will explain the concept and how insurance companies determine it.

High-risk auto insurance, in essence, is the coverage a driver has to buy when an auto insurance company feels they are riskier to insure than the average driver. When an insurance provider believes that you are prone to getting into an accident and filing claims more than other car owners, you have to buy a high-risk auto insurance policy.

Insurance companies have metrics that they use in determining this high-risk level. If you seek insurance, you must be aware of what it means to be labeled a high-risk driver and any possible measures to curtail the tendency.

Furthermore, if you have been labeled a high risk driver, I will show you some of the best and cheapest high risk auto insurance companies. These companies provide customized plans suited for high-risk drivers.

What is High Risk Auto Insurance?

what is high risk auto insurance

High-risk auto insurance also referred to as nonstandard auto insurance, is a coverage that is presented as the only insurance policy option to a driver that is considered a risk when insured. Insurance is a game of risks. However, insurance companies have a risk ratio they are comfortable dealing with, and when an insurance seeker goes beyond the benchmark, they are labeled high risk drivers.

To the insurance company, a high-risk driver has the propensity of getting into accidents and filing claims more than other drivers. These drivers would not be offered the same car insurance regular drivers are given due to their proposed risk value.

There are different sides to being a high risk driver. As I said earlier, an insurance company determines whether a driver is a high risk or not and has a predetermined set of standards to do so. You cannot control all the sides of being a high-risk driver. I will show you who insurance companies refer to as high risk.

High Risk Drivers

From the list below, you will see the group of persons called high-risk drivers. Insurance companies consider the following as high risk:

  1. Drivers who are teenagers
  2. Persons driving for the first-time
  3. Drivers who are 65 years and older
  4. Drivers with DUI convictions
  5. Persons with an elapsed coverage
  6. Persons who have zero or a poor credit score
  7. Drivers with moving violations

At Ramsey Solutions, there is a detailed explanation of the above-listed drivers. You can see that while being a teenager, first-time driver, and being a driver above 65 years are sides of being high risks that cannot be controlled, having DUI convictions, a bad credit score, and moving violations are events that can be avoided.

If a company offers high risk auto insurance, they issue an SR-22 document to a policyholder. An SR-22 is an official document proving that a driver has a minimum level of liability coverage, such as insurance that covers bodily injury and property damage caused by accident. A driver usually needs to have an SR-22 if they fall into the category of drivers listed above.

Cost of High Risk Auto Insurance

Will More of Motor1.com asserts that the cost of high risk auto insurance is 84 percent more than average car insurance. In essence, you should expect to pay more in premium than the regular car insurance policyholder, even if you are buying from the same insurance company.

The cost of high risk auto insurance is determined by age, state, driving record, credit score, and several others. A high-risk driver should expect to pay between $2500 and up to $6000 in insurance premiums annually. It is quintessential to note that how much high risk auto insurance will cost will differ from person to person, from state to state, and from company to company.

For instance, a teenage driver and a driver with DUI convictions, even though they are under the category of being high-risk drivers, insurance companies do not consider them equal. Hence, the DUI convicted driver would pay more premiums than the teenager. You can see it as a case of grievous and trivial sins. Both are sins, but the trivial can be deemed lesser in impact than the grievous sin.

In the United States, the average cost of auto insurance for drivers with a good credit score is $1700, but those with a bad credit score pay up to $3100 annually. It is only in California, Hawaii, and Massachusetts that a bad credit score does not affect the cost of insurance.

How to Reduce High Risk Auto Insurance

If you do not want to pay more or suffer from being a high risk driver, you must be intentional about dropping from the standards set by insurance companies for this category of people. There are essential steps to take to reduce high risk auto insurance, and they include:

Driving safely

Insurance companies determine your susceptibility to accidents and claims by the number of accidents you have had in the past. Hence, to reduce your high-risk car insurance, you must endeavor to drive safely. Avoid overspeeding, do not drink and drive, do not text while driving, and do not keep a baby with you in the driver’s seat, and so on.

Maintain a good credit score

For more persons, a bad credit score is why they fall into the category of high-risk drivers. Pay your bills promptly to maintain a good credit score. Aside from auto insurance, a good credit score will do you a world of good when you are making financial transactions in the United States.

Get a defensive driving certificate

Some auto insurers give teenage drivers and persons driving for the first time the benefit of escaping being labeled high risk drivers. You should check if the company offers the provision to get a defensive driving certificate for reduced auto insurance rates.

Buy insurance from cheap high risk auto insurance companies

There are auto insurance companies committed to providing coverage for high risk drivers. These companies offer customized insurance policies for drivers with all forms of risk under this category. If you are a high risk driver, it is wise to go for the companies positioned to provide cheap high risk auto insurance.

Cheap High Risk Auto Insurance Companies in the United States

If you have been labeled a high risk driver, the following are companies in the United States where you can get auto insurance:

  • GEICO
  • State Farm
  • The General
  • Safe Auto
  • National General
  • USAA
  • Nationwide
  • Allstate

The General, Safe Auto, and National General are among a category of insurance providers called nonstandard insurance companies in the above list. A nonstandard insurance company provides coverage to persons who find it difficult to get an insurance quote.

The only downside to nonstandard insurance companies is that they are regional in scope and do not cover as many states as standard insurance companies. Well, if the risk of insuring you is high and by high, I am not referring to those aspects of high risk drivers that are within your power, then you should consider shopping for insurance in nonstandard companies.

High Risk Auto Insurance Canada

There are a few options for Canadians shopping for high-risk auto insurance. If you want to get high risk auto insurance in Canada, the following companies are places you should be looking at:

Insurance Hero

It is safe to call Insurance Hero the safest destination for high-risk drivers in Canada. No matter the gravity of the violations, convictions, and factors that make one a high risk driver, Insurance Hero will find the most affordable plan for you.

The company is a recognized insurer in the online space in Canada, and you can be sure your dealings are safe. Claims are paid promptly, and the process is open 24/7.

Easyway Insurance

Easyway insurance is another high-risk insurer in Canada. They offer high-risk insurance to Canadian drivers from Ontario to Toronto to Windsor, including Barrie, Mississauga, Burlington, etc. The company provides access to high risk insurance rates and coverage, short-term and long-term insurance policies, and professional claims assistance, among other things.

iSure

iSure is undoubtedly one of the best high-risk insurers in the world. The company’s ultimate goal is to provide auto insurance coverage for high risk drivers while ensuring they keep them on track to leave the market. In essence, iSure offers high risk insurance to give drivers a sense of protection while pushing them to leave the high risk domain.

Conclusion

Even the best drivers can make mistakes and become high risk drivers. This is one of the many reasons why high risk auto insurance had to be created. The biggest takeaway on the issue of high risk insurance is that you are paying more than regular insurance policyholders. We must give it up to insurance companies that have tried to make auto insurance for high risk drivers cheap. 

Autoturin.com is not affiliated with any insurance companies mentioned in this article. This article’s conclusions, recommendations, and citations are for informational purposes only and not a validation of any known institution, organization, or company.

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