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UPDATED: Dec 13, 2017
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When you are looking for auto coverage and find yourself needing a high-risk auto policy, you may realize that you are a higher risk than you thought.
High-risk insurance policies are designed for drivers that cannot get coverage under a more traditional policy; these policies often come with:
- Higher premiums
- Higher deductibles
- Limits on coverage
If you are looking at acquiring a high-risk policy, there are different things to keep in mind. Start with our comparison search so you can get the best rate possible.
Options For Coverage
High-risk policies come in two main options:
- State-assigned risk pools
- Private insurance providers that specialize in high-risk policies
A state-assigned risk pool works by assigning drivers that are deemed as high-risk to a provider that operates within the state. This means that you will be given an insurance policy through a reputable insurance carrier, but you will not be given a choice in the matter.
These insurance carriers are then obligated to provide you with insurance coverage; often at a higher premium cost and with stipulations on which coverage options you may select.
Private insurance providers are another option for high-risk policies, as several companies specialize in providing coverage to high-risk drivers.
Once again, these policies often carry a higher price tag, but private insurance companies may offer you more options when it comes to your deductibles and your coverage options.
If you are interested in joining a state assigned risk pool or if you are trying to locate a private insurance provider that works with high-risk drivers, your Department of Insurance may be able to help you.
They should be willing to provide you with more details about your options as well as who you should contact.
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Understanding Your Risk Factors
Your risk factors are a group of details that any insurance provider will look at when they are deciding to provide you with coverage or not.
Unfortunately, each insurance carrier can take different factors into consideration, and they are not obligated to provide you with coverage even if auto insurance is compulsory in your state; almost every state requires drivers to carry auto insurance.
If you find that traditional providers are labeling you a high-risk driver, understanding your risk factors can help you make changes that can help you obtain traditional coverage in the future. There are factors that you can change or influence, such as:
- Your driving record
- Your insurance history
- Where you store your vehicle
There are also factors that cannot be changed or influenced, such as your age or your gender.
Having a poor driving record, a history of claims, multiple accidents, or a history of not managing your insurance policy responsibly can be a red flag to any carrier.
Having a record of multiple offenses on either record can show that you are not a responsible driver; this can be a predictor of future claims. If an insurance carrier feels that you will cost much more than you pay in premiums, they may be unwilling to provide you with coverage.
Where you live can also influence your ability to obtain a traditional policy or not. If you live in an area with high rates of crime related to vehicles, such as theft or vandalism, insurance carriers may not be willing to insure that risk.
Another reason an insurance carrier may be hesitant to provide coverage is in specialized situations, such as when you own a unique, exotic, or otherwise special car.
For instance, an insurance carrier may not be equipped to handle the specific risk associated with a high-performance sports car. They may decide not to provide insurance to these vehicles to avoid the risk entirely.
If any of these risk factors apply to your situation, you may need to look at high-risk insurance carriers to provide you with coverage. Keep in mind that there are several factors that go into determining your policy’s coverage options, coverage limits, and premium costs.
If you find that one carrier is unable to meet your needs, you may want to look at getting quotes from multiple providers to see what your options are.
Acquiring coverage through a traditional insurance carrier is often simpler and more cost-effective than utilizing high-risk insurance providers.
However, if you find yourself needing a high-risk policy due to your risk factors, there are options you can pursue; keep in mind these often come at a higher cost compared to a traditional policy.
You can get a high-risk policy through a state assigned risk pool, which will result in your policy being assigned to a provider that operates in your state.
You may also be able to purchase coverage through a private insurance company; there are several of these that specialize in insuring high-risk drivers.
If you would like to move into more traditional auto insurance, make positive changes and efforts to alter your risk factors; the risk factors that you can control can help outweigh the ones you cannot.
Some ways you may influence your risk could include avoiding accidents or incidents whenever possible, paying your insurance premiums on time, paying for small claims out of pocket, and storing your vehicle in a low-crime or secured location.
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