Auto insurance companies measure risk in a lot of ways, then charge you accordingly.
Accidents and tickets and DUIs make you risky. But so do bad credit or a lapse in your insurance coverage.
Your risk determines which companies are willing to insure you. No two have the same guidelines or will charge you the same price, though. Compare auto insurance quotes so you know you're getting the best rate.
Here's what to expect as you shop for coverage, how you can save money on the policy you buy today, and how to save even more in the future.
- Who is a high-risk driver?
- High-risk auto insurance companies
- Can I still save money on car insurance?
- 6 things to expect from a high-risk policy
- How do I get back to a standard policy?
Generally, those deemed high risk by insurance companies fall into one of these categories:
Inexperienced drivers: You’ve been driving less than eight to 10 years. Most insurance companies levy an inexperience surcharge that’s greatest for those who are newly licensed and gradually shrinks with each passing year.
Young drivers: Car insurance for teens is the highest among drivers because they have by far the most accidents. Only part of it is their inexperience. Every insurance company “buckets” age groups differently, but if you’re under age 25 you can expect to be dumped into the most expensive one.
Drivers with black marks on their record: A single ticket or minor fender bender might not make you high-risk, but multiple tickets or a serious infraction – reckless driving or a DUI – certainly will. So will multiple at-fault claims. An SR-22 requirement doesn't make you high risk, but the infraction that caused it does - so you'll need SR-22 insurance.
Drivers not currently insured: If you have a license but no insurance, insurance companies assume you’ve been driving uninsured and are therefore riskier.
Drivers with bad credit: Drivers with poor credit-based insurance scores tend to file more frequent claims.
If you are a high-risk driver, that means you will be unable to purchase the same policies at the same rates as drivers who fall into the standard and preferred categories. Those drivers, who have no or few violations, minimal claims, good credit and a continuous insurance history, get better rates because they pose less risk. Preferred drivers, who are older, married and own homes, pay the least and get the most discounts.
As a high-risk driver, you may be able to buy a standard policy at a higher rate from a traditional insurance company, or you may buy what's known as a nonstandard policy, where there are restrictions on, say, who can drive the car or how much coverage you can buy.
The nonstandard market represents about one-fifth of all private auto insurance sold and draws both small, niche companies, and the big boys, like Progressive and Nationwide, which have divisions selling nonstandard policies.
"Drivers typically pay more for nonstandard policies," says Insurance.com Managing Editor Michelle Megna. "But that's because their driving record or insurance history has flaws. Nonstandard policies are a way to customize coverage to make it more affordable."
Here is a list of some insurance companies that sell high-risk auto insurance policies:
- The General, a subsidiary of American Family Insurance
- Titan Insurance, a subsidiary of Nationwide Insurance
- Dairyland Insurance, a subsidiary of Sentry Insurance
- Geico Casualty, the high-risk branch Geico
- Infinity Insurance
- Safe Auto Insurance
- Gainsco Insurance
- Victoria Insurance
- Bristol West Insurance
- Affirmative Insurance
- Alliance United Insurance
- United Automobile Insurance
- Access Auto Insurance