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UPDATED: Mar 13, 2020
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Most drivers can take advantage of a very competitive environment for car insurance but drivers who are considered high risk often have much limited options. Anytime a high risk event occurs which increases “your odds of filing a future claim” then car insurance companies will adjust your eligibility for coverage. Some car insurance companies will simply offer higher premiums to account for the greater risk while others will deny your coverage. The definition of who is a high risk driver can often be obvious but sometimes it’s not so obvious.
What is High Risk?
Car insurance companies calculate premiums based on the risk of a driver filing a future claim and while all drivers have some risk of filing a claim there are proven elements which provider a greater risk to insuring an individual. Whether it’s a poor credit score, a DUI conviction or prior claims any kind of high risk element will have an impact on your car insurance rates.
How do car insurance companies adjust for high risk drivers?
Every car insurance company has their own method of determining risk however if you are viewed as high risk by an auto insurance company three things can happen.
Higher Premiums: Based on your risk the car insurance company will adjust your premiums to reflect the greater risk. Sometimes the premium can be slightly higher whereas other times it can simply be unaffordable so you need to look elsewhere for coverage.
Discount Removal or Ineligibility: The good driver discount is the most common discount and can often save up to 20% or more on premiums. High risk drivers however are rarely eligible for this discount so you will get higher car insurance quotes since you will not qualify for the common discounts which make up for many of the advertised car insurance rates.
Coverage Denial: Car insurance companies have no obligation to insure you and very high risk drivers – especially those with a DUI Conviction – can be denied or dropped coverage from many of the famous brands regardless of the good driving history prior to the conviction. When this happens you need to search for companies who specialize in high risk car insurance or shop around and compare other providers which may have more flexible guidelines. Car insurance after a DUI or DWI is often very expensive and provider choices limited.
What are the most common reasons to be classified as a high risk driver?
A DUI or DWI conviction is not the only reason to be classified as a high risk driver. In fact, the irony about car insurance is if you submit an insurance claim you can often be classified as higher risk than those drivers who have never filed a claim… yet, isn’t that why you have insurance? Some of the most common reasons to be classified as high risk are:
People with speeding tickets, accident history, DUI or DWI conviction – anything which proves you are less responsible behind the wheel than a driver with a clean driving record will push you to the higher risk category.
Studies show that people with bad credit are often more likely to file a claim. It’s important to note that your credit score has nothing to do with your driving skills but simply the likelihood that you have a greater chance of filing a claim in a car accident. Logically this makes sense since minor car accidents are often handled between 2 parties without filing a claim but if you have bad credit you probably have less resources and credit which makes the only option for getting your car repaired as filing a claim.
Other factors which play a large role in calculating car insurance premiums include where you live, the type of vehicle insured and more. Most other factors do not classify individual drivers as high risk but do play a role in the general risk of your profile which can lead to higher rates. For example, if you live in an area with a high incident rate of car theft you will pay more than somewhere else.
How much is high risk car insurance?
High risk car insurance can be very expensive but it all depends on how high risk you are. For drivers with a single accident or claim then the risk adjustment may be only a few dollars a month however if your profile consists of a DUI or DWI conviction then auto insurance can be up to 200% or higher than typical rates.
How do I find cheap high risk car insurance?
Car insurance comparison will be your key to affordable car insurance regardless if you are considered high risk or not. It’s always important to shop around and compare car insurance companies and if you happen to have a high risk driving record it’s more important than ever. For drivers who are denied coverage through the voluntary market there are state programs available to assist you in obtaining coverage although you must show proof of coverage denial. Often times these programs are cheaper than some high-risk car insurance companies but it can be difficult obtaining coverage. Most licensed car insurance agents are familiar with the state programs for high risk drivers so always contact an insurance agent and speak about your options if you continue to get denied insurance.