What You Should Know for Special Risk Car Insurance

Special risk car insurance is an auto insurance policy for specialty vehicles, like collector cars, watercrafts, and motorcycles. Special risk auto insurance is very customizable to accommodate the unique needs of these vehicles. Enter your ZIP code below to start comparing special risk car insurance quotes from top-rated companies for free.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Jun 4, 2021

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Special risk car insurance is car insurance for special vehicles like collector’s cars and hot rods. The first thing you should know is that this insurance is very customizable. You can adjust the policy to match the amount of miles you expect to put on your specialty vehicle, where you intend to keep it, and how much the vehicle is worth, among other things.

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The customization available for special risk car insurance can make the policies quite affordable. If you have a collector car that you always keep in the garage and you only take it out twice a year to display it at car shows, it’s not likely to have an accident, so the insurance premiums will probably be low.

Collector cars, however, do not have airbags, anti-lock brakes, and other modern safety features, so there still is some risk to the insurer for which they will need to charge you.

Other Vehicles that Need Special Risk Insurance

There are many motor vehicles that aren’t exactly cars or trucks that it could be in your best interest to insure. Motorcycles are obvious members of this category and most car insurance companies will offer motorcycle insurance policies that are similar to car insurance. All-Terrain Vehicles (ATVs) and snowmobiles also have special risk policies available, but people don’t always insure them.

Boats and other recreational watercraft can be insured. In most cases, based on how expensive they are to fix and how dangerous they can be, they really should be insured. Commercial equipment including large trucks, tractors and other farm equipment should also be insured, but most would require special commercial insurance policies.

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High-Risk Car Insurance

High-risk car insurance is an expensive insurance tailored specifically to drivers whose records makes them higher risks for an accident. An article in The Collee Manual mentions that you could be considered a high-risk driver even if you only have one major violation, such as a suspended license or a citation for driving under the influence of alcohol.

If you have several minor infractions, such as speeding tickets, on your record they could put you in the high-risk category.

Drivers are forced to resort to high-risk car insurance when their current carrier drops them. This is usually due to too many claims or a very serious moving violation. After applying and being turned down by many normal insurance carriers, the driver will have no choice but to go to a high-risk insurer. The cost will often be very high, but since car insurance is required in most states, the driver will have no choice but to pay if they want to drive legally.

Staying Out of the High-Risk Insurance Group

The obvious way to stay out of the high-risk insurance group is to drive safely. There are many conscious choices we make that affect the overall safety of our driving and help determine the frequency of our accidents and moving violations.

For instance, deciding to wear a seatbelt, use child safety seats, and driving the speed limit will greatly reduce the number of moving violations you receive. It will also decrease the probability of severe or catastrophic injury as the result of a minor accident.

If your driving record already has some negative marks on it, there is still something you can do in addition to driving more safely and waiting for the record to improve with time.

According to VirginiaTrafficCourt.com, you can get five demerits removed from your driving record in that state by taking a driver safety course. If your state offers a similar program, you could improve your driving record by taking the course. You could also receive a discount on your insurance premiums since most auto insurance companies give a discount for safe driver course completion.

Other Types of Insurance to Protect Your Car

If you have a normal car or truck, there are a few different ways that insurance can protect it. The most common type of insurance to protect a car is personal liability and property damage coverage.

The theory behind personal liability/property damage insurance is that the person responsible for the accident will have his insurance pay for the damages to the other vehicles and property involved. This works well as long as you’re not the victim of a hit-and-run accident, the person who caused the accident has insurance, and you’re not the one at fault for the accident.

For those circumstances where liability property damage would not help you, collision insurance probably would.

Collision insurance will cover damages to your car when it hits something. It does not matter who is at fault in the accident. It will however, only cover an actual collision, where a vehicle is moving and it hits another vehicle or some other object.

There are other ways a car could be lost or damaged. Comprehensive insurance will cover damages to a car from things like vandalism or weather. This type of insurance will also cover theft.

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Other Types of Insurance to Protect Yourself

Just like personal liability/property damage insurance, the personal injury liability insurance of the person who causes an accident is assumed to cover your injury expenses in case of a car accident. As with liability insurance, the other driver’s personal injury liability coverage will not help you if you caused the accident.

If the driver of the car who caused the accident is not covered, or if that driver flees the scene of the accident, uninsured or underinsured motorist insurance should cover your medical expenses. If you are the at-fault driver, you would need to have personal injury protection (PIP) insurance or else you would be relying on just your normal health insurance to cover the cost of medical treatment.

Insurance Requirements

At this time, the vast majority of states have an insurance requirement, and most of the others require you to either have insurance or give proof of financial responsibility. This basically means that a driver must either have insurance or have enough available cash to pay for reasonable expenses in the event of an accident.

The states that do not require actual auto insurance include New Hampshire, California, Ohio, Tennessee, Washington, and Texas.

For the states that have an insurance requirement, the requirement is usually liability insurance. For example, the state of Oregon has liability requirements of $25,000 for injury per person and $20,000 for property damage.

Many experts suggest that these minimums are too low and you should carry more, maybe even one and a half to two times that amount to protect yourself from financial hardship after an accident.

Another type of car insurance that states sometimes require is personal injury protection (PIP) insurance. In many no-fault states where the driver is responsible for their own medical bills regardless of who causes the accident, the government will require insurance companies to offer PIP Insurance.

Often a driver will be forced to sign a waiver if they refuse to take PIP insurance from their insurer.

In addition to minimum insurance requirements, a driver might be required to purchase additional insurance if they borrow money to buy a car. The lender wants to be sure that they will be paid no matter what happens to the car, so they will require a driver to purchase collision and comprehensive coverage to make sure that any damage to the car is paid for.

Shopping for Insurance

When the time comes for you to buy insurance, the process of shopping is much easier now than it has been in decades past. Instead of calling and/or visiting multiple insurance agents, you can generally find an agent from the comfort of your own home by using the Internet. You can search for individual insurers or use a comparison site that lists several at a time.

When shopping for car insurance, you must make every effort to make a fair comparison. To do this, you need to match up the features between competing policies as closely as possible and then decide which of those features are most important to you.

For instance, if a policy is $50 a month cheaper but has a deductible that $3,000 higher than its nearest competitor and it has more coverage exclusions, it’s not as good a deal as it appears to be.

You should also check into the customer satisfaction ratings of the insurance companies you’re considering when it comes to claims. Having a cheap company that doesn’t support you when you have a claim is not very beneficial either.

Some con artists posing as insurance companies are actual scam artists who will disappear the minute you make a claim. It’s best to do your homework and research your insurance provider before you commit to them or send them any money when shopping for special risk car insurance.

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