High Risk Driver Auto Insurance Options

Shopping for auto insurance can be difficult if you’re lucky enough to have a fancy sports car in the garage — or unlucky enough to have an accident or speeding ticket on your driving record. Although anything out of the ordinary can make it harder to qualify for a standard or preferred-rate auto insurance policy with the best terms and prices, drivers in special circumstances still have plenty of options.

So-called “nonstandard auto coverage” is available across all 50 states and Washington, D.C. StoneRidge Advisors, an investment banking firm, estimated the size of the nonstandard auto market at $35 billion in premiums paid in 2012. Although the economic downturn caused some contraction in the nonstandard auto insurance market, it still offers drivers plenty of options.

The wide variety of choices and terms can overwhelm even the most experienced insurance shoppers. Shopping around on the Internet for random quotes often fails to yield satisfactory results. That’s why knowledgeable agents who are familiar with the driver’s details and the most suitable programs can save customers both time and money by finding the best fit.

You don’t have to settle for a second-rate insurer you’ve never heard of. Most of the largest auto insurance companies also compete in the nonstandard market, offering different rates on nonstandard, standard and preferred policies.
How do you know if you’re considered a “high-risk” driver?
The criteria are not written in stone, but the following guidelines generally apply:

• If you are returning to the driving pool after having had your license suspended or revoked.
• If you are 70 years old or older.
• If you are 20 years old or younger.
• If you have a DUI.
• If you have a history of traffic violations.
• If you’ve had an excessive number of claims or accidents.
• If you are an inexperienced principal operator of a vehicle.
• If you have a high-performance car, a custom-built vehicle or a classic car.
• If you have experienced a lapse in coverage.

Often just one of these reasons will be enough to prevent you from qualifying for standard insurance coverage — two or more increase that likelihood exponentially. In such cases, having an experienced agent guide you becomes even more important, since some companies will refuse coverage altogether, while the ones that do offer you policies will vary widely in price, coverage and terms, such as deductibles and limits on liability and medical claims.

Even if your agent cannot find applicable nonstandard coverage, that doesn’t mean it’s the end of the road. Every state in the country also operates assigned risk, residual or shared risk plans that function as an insurer of last resort when no other company will accept you. These policies often limit your coverage to the minimum amount required by state law. Insurance under an assigned risk plan is usually going to cost more, but the plan must accept you if you and your vehicle are legally allowed to drive. If you keep a clean driving record for a period of three years and send in your premium payments on time, you should be able to get out of the assigned risk auto insurance category and get a better deal.

Overall, the insurance offerings for “nonstandard” drivers have vastly improved from what was available until the late 1990s. Until then, nonstandard drivers often had no option but to take out coverage through a shared or state-assigned pool. But the advent of more powerful computers and analytic programs enable underwriters to more accurately judge the risk of drivers who fall outside the normal parameters. These nonstandard policies are offered by commercial carriers, and since they are tailored to individual risk, they are usually much less expensive than coverage through the state-assigned pools.