Auto Insurance

What Is High-risk Auto Insurance?

If you’re prone to accidents, have a history of collisions, or own exotic vehicles, high-risk auto insurance may be the right choice for you.

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High-risk auto insurance is for drivers who are more likely to get into an accident and file a claim. This may include drivers who have a history of accidents or have at least one DUI conviction.

Due to the types of drivers that fall into the high-risk driver category, there may be an increased liability presented to the insurance company. For that reason, coverage for high-risk auto insurance may be more expensive compared to standard auto insurance. 

Who Needs a High-Risk Insurance Policy?

Drivers who may need a high-risk insurance policy include:  

  • Teenage drivers: Compared to experienced adult drivers over 20 years old, teenage drivers between the ages of 16-19 are 3 times more likely to be involved in a fatal crash. While they may not need an insurance policy specifically for high-risk drivers, auto insurance premiums are likely to be significantly higher for teenage drivers for this reason.
  • 65 and older: There are age-related health concerns that insurers take into account, such as hearing and vision loss, slower reflexes, and medication side effects. In older adults, these issues tend to become more prevalent, making them a riskier demographic group. Like teenage drivers, older drivers may not need an insurance policy specifically designed for high-risk drivers, but they can expect to pay significantly higher auto insurance costs.
  • Owning an exotic vehicle: Exotic vehicles may be expensive to insure due to higher repair costs. Insurance companies may only work with specific auto repair shops, and they may not have a mechanic within their network who can specifically work on your vehicle. This makes your vehicle riskier to insure.
  • History of at-fault collisions: Insurance companies could see you as a liability on the road based on how many at-fault collisions you’ve had. While more minor incidents could drop off your driving record within 5 years, major convictions such as vehicular assault could stay on your record for life.
  • Drivers with DUI convictions: Drinking and driving automatically places you as a high-risk driver. Insurers often go back 3 to 5 years to check if you were convicted of any DUIs and/or DWIs.

While some of these factors are out of your control, such as your age, minimizing your other risks could decrease your risk profile.

Where Can You Get a High-Risk Policy?

Not all auto insurance companies offer policies to high-risk drivers, but there are companies that specialize in high-risk auto insurance, also known as a non-standard auto insurance policy.

When applying for a high-risk insurance policy, you may need to also request SR-22 insurance. The SR-22 is not actually insurance, but rather a financial form you receive with an auto insurance policy that verifies you have purchased the minimum required auto insurance coverage in your state. Your insurer would submit this to your state on your behalf. If you’re located in Virginia and Florida, a comparable form is called an FR-44.

Maintain At Least Minimum Required Coverage

Every state has a minimum required coverage for both standard and high-risk auto insurance policies. These minimums satisfy the state’s Financial Responsibility Law, where in the event of an accident, the driver must prove that they can pay for the resulting damages. Check with your state’s Department of Insurance to find out what your minimum coverages should be.

How Much Does Car Insurance Cost for High-Risk Drivers?

The cost of car insurance for high-risk drivers varies between different insurers based on their plans and coverage options. In addition, your age, driving record, and credit score could impact the overall cost of your policy. In general, though, rates for high-risk drivers are typically higher than standard insurance rates.

How to Make High-Risk Car Insurance More Affordable

High-risk coverage is more expensive than standard car insurance, but there are actions you can take to lower your premiums.

Improve Your Credit Score

A credit score is based on your history of timely payment for bills, and any outstanding loans and debt that you may have, such as personal loans, mortgages, and credit card debt. Your credit score could infer to insurers how likely you are to pay your premiums on time. Ways you could improve your credit score include: 

  • Consistently paying bills on time 
  • Paying down debts 
  • Asking for a higher credit limit as long as you do not incur additional debt

As you’re improving your credit score, bear in mind that there are also things that could hurt your credit score. Try to avoid the following:

  • Maxing out a credit card 
  • Having an account sent to collections 
  • Inquiring about new credit accounts 

The higher your credit score, the more creditworthy you look to insurance companies and other potential lenders. This may allow insurers to lower your auto insurance rates. 

Take a Defensive Driving Course

Taking a defensive driving course may reduce the points on your driver’s license or remove a minor violation from your driving record. This could help reduce your auto insurance rates as it improves your record and shows that you have learned safer driving skills.

Depending on the state that you’re in, defensive driving courses could range from 4 to 8 hours, and the content is regulated by each state. Point reduction also varies based on where you live. For example, an individual in Wisconsin may take up to 3 points off their license by satisfactorily completing defensive driving courses, while in New York drivers can take up to 4 points off. 

Drive Less

Driving less could help lower your rates because it reduces the chance of at-fault collisions — the less time you spend on the road, the less likely you are to be in an accident. Conversely, the more you drive, the more at risk you could be for accidents. For this reason, insurers may take the amount of driving you do into account when you apply for auto insurance coverage.

Carpooling, taking public transportation, or biking could help you cut down on the amount of driving you do. In addition, some insurers offer low-mileage discounts based on your annual mileage. The lower your mileage, the more likely you are to be eligible for these types of discounts or a less expensive car insurance policy overall.

Maintain Active Auto Insurance Coverage

Having gaps or lapses in your policy coverage could be interpreted as high risk, as it could indicate periods where you drove your car while uninsured. A lapse could happen if you formally cancel your insurance, or if your insurance coverage stops due to unpaid premiums, late payments, or neglecting to renew your policy.

Even if you’re driving less, canceling your car insurance policy or letting it lapse could be seen as risky behavior. If you plan on not having your own car altogether, you could purchase non-owner car insurance instead. For example, if you are a college student who left your car at your parents’ house and only drive when you are visiting, you would still need car insurance coverage for those few times a year when you do drive.

Non-owner car insurance, also known as non-drivers insurance, provides bodily injury and property damage coverage specifically for those who drive but do not own a car. This could also cover those who drive rental cars or borrow someone else’s car.