High-risk car insurance guide
Are you a high-risk driver?
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. The surcharge is highest for those who are newly licensed and gradually shrinks with each year that you drive.
Young drivers: Car insurance for teens is among the very highest because young people have by far the most accidents. Only part of the high rate is due 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 bucket.
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. These could require you to get an SR-22, a form from the insurance company that verifies you have 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. An Insurance.com rate analysis found they are charged a rate that is an average of 71% than it is for drivers with good credit.
What is the best insurance company for high-risk drivers?
If you are a high-risk driver, 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.
“Not all insurers treat high-risk drivers the same way,” says Penny Gusner, a senior consumer analyst for Insurance.com. “Some companies will assess much harsher rate penalties than others on high-risk customers, which means it's always wise to compare car insurance quotes before buying a high-risk policy.”
Here is a list of some insurance companies that sell high-risk auto insurance policies:
- The General, a subsidiary of American Family Insurance
- Direct Auto Insurance, a subsidiary of Direct General Insurance Group
- Titan Insurance, a subsidiary of Nationwide Insurance
- Dairyland Insurance, a subsidiary of Sentry Insurance
- GEICO Casualty, the high-risk branch of GEICO
- Infinity Insurance, a subsidiary of Kemper Corporation
- SafeAuto Insurance
- GAINSCO Auto Insurance
- Bristol West Insurance
- Affirmative Insurance
- Alliance United Insurance, a division of Kemper Corporation
- United Automobile Insurance Company
- Access Auto Insurance
How much does high-risk auto insurance cost?
The bad news: You'll pay more for coverage as a high-risk driver. For instance, an Insurance.com rate analysis found that, on average, drivers will pay 79% more after a first drunken driving conviction; 71% more if they have poor credit and live in a state that allows credit to be considered; 43% more for two speeding tickets; and 32% more after an at-fault accident that injures another motorist.
The good news: You'll probably save more money by comparing car insurance rates than a standard or preferred driver would, because you're starting from a much higher rate to begin with.
For example, an insurance.com analysis found that among five of the country’s largest auto insurers a DUI conviction increased a driver’s rate, on average, between 33% and 125%.
We have solutions for your DUI insurance needs because every company calculates rates differently and we can show you side-by-side quotes so you get an affordable solution. The differences are usually hundreds -- and sometimes thousands -- of dollars.
| Company | Average rate | DUI rate | $ increase | % increase |
|---|---|---|---|---|
| State Farm | $1,186 | $1,633 | $447 | 38% |
| Progressive | $1,518 | $2,019 | $501 | 33% |
| Farmers | $1,520 | $2,228 | $708 | 47% |
| Allstate | $1,898 | $3,132 | $1,234 | 65% |
| Nationwide | $1,586 | $3,563 | $1,977 | 125% |
What is a high-risk car insurance policy?
If you're going with the nonstandard route in order to pay lower rates, whether good driver or bad, here are some things to keep in mind.
You may have limits on who can drive your car. With a standard policy, you should list anyone on your policy who lives in your house or drives your vehicle regularly. If you have out-of-town visitors staying with you for a week or two, they are allowed to drive your car without having to be added to your policy.
In comparison, some companies that sell nonstandard auto insurance will let you cover only specific drivers who are named in the policy. If someone who isn't listed, like your mother-in-law, gets in the driver's seat and gets in a wreck, your insurance company may not honor your claim.
In addition, the insurance company could ask you to exclude certain household members, often those under age 25.
Your coverage may be reduced in some circumstances. You may face what are known as step-down provisions that reduce the amount of liability coverage if someone who isn't named on your policy is at the wheel. That means if your cousin comes for a visit and borrows your car, the liability coverage will be lower than if you were driving. In many cases, a state's minimum requirements fall short of what you would need to pay for injuries or property damage to someone else's vehicle.
Your driving record may be checked more often. Insurers may not check a low-risk driver's motor vehicle record (MVR) every renewal period. It may go even a year or two between checks, experts say, allowing some infractions to escape notice until then. The worse your record, the more likely that your MVR will be pulled every renewal period and your rates adjusted. You can also check your own driving record, to ensure there are no mistakes.
You may see a smaller check after an accident. If you purchase comprehensive and collision coverage with a nonstandard policy, you also could see a difference at the auto repair shop if you're involved in an accident.
A standard policy will generally cover the full cost of repairs, unless your auto insurer decides your car is a total loss. If your car is totaled, you'll receive the depreciated value of the car, which is its market value just before the wreck.
Unlike a standard policy, your nonstandard policy may depreciate your repairs. So rather than covering the full cost of repairing the damage if you're in a fender-bender, the policy would pay only a portion of the cost, which is determined by the depreciation of the vehicle.
You may not be insured for punitive damages. A nonstandard policy also may not cover you if you're in a wreck and you're sued for punitive damages and lose.
You may miss the little extras. Even if you're a safe driver, you can forget being offered benefits such as having a vanishing deductible or accident forgiveness if you opt for a nonstandard policy.
How long will I be considered a high-risk driver?
Time and a clean record will improve your chances of getting standard coverage at much more attractive rates. The factors that an insurance company will evaluate include:
Your driving record: Most insurance companies usually look back three years – sometimes as many as five years — for infractions. The newer the accident or ticket, the more heavily it will be weighed. You may be able to erase traffic points with a defensive driving class, too.
Your insurance history: If you were uninsured before, a single term of coverage will erase the previously uninsured status that dinged your record. Consider shopping for car insurance again as your renewal date nears, since you will likely be able to get a better rate.
A better credit record: You can ask for an insurer to recalculate your rates at the next renewal if you think your credit has improved. Or consider comparing quotes again. A newly improved credit score will bolster your chances of saving money. Insurance with bad credit can be expensive, but some carriers will treat you more favorably than others.
