High-Risk Car Insurance
High-risk car insurance isn’t a type of auto coverage but rather a classification. Car insurance becomes high-risk when the driver or policyholder is deemed so. Being classified as a high-risk driver is by no means the end of your driving career. In fact, most high-risk drivers are just beginning theirs. It just means that car insurance companies assess you as having a higher chance of filing an insurance claim –so they charge more for their services. The good news is that no one really stays a high-risk driver forever.
What Makes a High-Risk Driver
Some drivers can’t help but be assessed as high-risk by car insurance companies. Other times, their high-risk classification is because of them. That being said, there are instances of potentially good drivers being classified as high-risk. High-risk drivers are classified as the following:
- Teen drivers – With drivers becoming certified and licensed around the age of 16, new drivers are pretty young people. Without much of a driving record to go on, insurance companies will charge them higher premiums since young drivers tend to have higher accident rates than any other driver. Teen drivers pay the highest for car insurance, so they often start off on their parents’ policy. This is also the case for first-time drivers.
- Senior drivers – Car insurance rates tend to average out when the driver is aged 26 to 65. When you get older and reaction time to situations slow, your car insurance rates will reflect that. While older drivers are not high-risk in the traditional sense but still pay a little more than normal.
- Lapsed coverage – If there is one thing to avoid with car insurance, it’s having long periods of no coverage between policy renewals. This is referred to as “coverage lapses.” Car insurance providers will notice this. Driving without car insurance is illegal in several states and is an easy way to get in trouble with the law and pay more for coverage.
- Poor credit score – Similar to lapsed coverage, car insurance companies look at potential policyholders’ credit scores. Car insurance is all about making your monthly payments on time, and what better way to judge financial responsibility than a credit score that is based on the same exact thing. Not all states do this, but maintaining a good credit score is important in order to rent an apartment, for example.
- Traffic violations – Naturally, drivers with a series of violations on their driving record will be labeled as high-risk by car insurance companies. They specifically look for moving violations that happen while you are driving. Accidents result in damage which results in claims which are why insurance rates are increased.
- DUIs – The most significant violation that can more than affect your car insurance rates is a DUI. In addition to legal consequences, insurance rates are at least doubled for drivers with a DUI. They may also be required to carry what is known as SR-22 insurance with their state’s DMV and insurance company. These are the most high-risk drivers, according to them, and the SR-22 proves it.
- Road incidents – Hit-and-runs, several collisions, and road rage are instances that can have you classified as a high-risk driver if these behaviors are regular. This is why several car insurance companies have safe driving discounts to incentivize better habits on the road.
SR-22 Car Insurance
SR-22 insurance isn’t actually a type of car insurance. It’s a certification that a high-risk driver, usually convicted of a DUI, carries appropriate car insurance. This car insurance costs more, being for drivers of this nature, but it is necessary to keep drivers in danger of losing their driving privileges on the road. SR-22s are typically required by the DMV and filed through car insurance providers. They are maintained for about three years and renewed on an annual basis. Again, insurance rates are typically higher for drivers who carry one.
Lowering High-Risk Car Insurance Rates
As you read in the beginning, high-risk car insurance and the rates that follow aren’t the end of your financial world. The ways to save on car insurance still apply to high-risk drivers. While not every discount can be taken advantage of by a high-risk driver, the most accessible ones are the following:
- Pay rates on time – Credit score and financial responsibility can go a long way with car insurance. So, it helps to stay on top of any and all payments, including monthly insurance and credit cards, as your insurance provider is looking at them. Budgeting can really help here.
- Enroll in a defensive driving course – The most reliable car insurance discount is the defensive driving one given upon completion of such a course. This discount is available and encouraged for high-risk drivers because it shows they are taking active steps to become safer drivers.
- Remain out of trouble – Your driving record will have notes of any traffic violations and incidents for a couple of years to come. These will go away on their own in time, so until then, you should stay out of trouble to add any more consequences. This directly leads us to the next available discount.
- Safe driving – Above all, make safe driving a regular habit. Car insurance companies always take notice of it because you are never filing a claim. The goal of car insurance is truly to not use it.
High-Risk Car Insurance Costs
Right off the bat, we can tell you that car insurance for high-risk drivers is much higher than average –as great as 84%, in fact. The average driver can be paying around $1,732 annually for car insurance, for example. If they were to get a DUI, their rates would increase to around $3,188. There are specialized car insurance companies that deal with high-risk drivers and are less likely to turn down a potential policyholder. These can be both local and national providers, so high-risk drivers have a little bit of variety when it comes to car insurance shopping. So, be sure to take advantage of free online quote calculators to see where you stand on high-risk car insurance costs until you are able to lower your rates again.