Why you may need high risk can insurance, what are the options, and how long do you have to carry the policy
High risk insurance is not a pleasant experience. When insurance companies deem drivers ‘risky’, they send them to a special division (company) or refuse to write a policy altogether.
High risk auto insurance is not cheap. It’s not pretty. But the good news is it’s also not permanent.
Drivers with spotless driving records are typically placed in a ‘standard’ auto insurance company. These are companies that advertise on TV. Most people can stay in a standard company if they have a minor accident or a single ticket, but after that they’re forced to insure with a high risk company.
High Risk Insurance For Two Types of Drivers
High risk companies can be affiliated with the higher-profile standard companies or operate separately. Naturally, they are more expensive. High risk insurance companies to two types of drivers:
- People with no (or recent) driving records.
- People with less-than-perfect driving records.
Drivers With No Driving Record
Insurance companies typically define ‘no driving record’ as not having driven for the past 3-5 years. These drivers are often put in high risk insurance companies to establish their auto insurance history. These drivers tend to be genuinely new drivers who just got their license, or perhaps those who were licensed in the past but haven’t driven recently.
The potential of getting stuck with high risk insurance is yet another good reason to keep continuous coverage on your auto insurance.
Most people in this category can move to the standard companies in 6-12 months provided they maintain a clean driving record – though each company is different on when you can move.
Drivers With Bad Driving Records
Drivers with bad records are usually consigned to the high risk insurance companies for a longer period of time. If you have a driving violation that requires you to file an SR-22, which is basically a proof of minimum liability insurance coverage sent to the state, you’re almost certainly going to a high risk company for your auto insurance needs.
Don’t worry about the SR-22 itself though. High risk insurance companies are all quite familiar with them and will file them on your behalf for a nominal fee, or perhaps no fee at all. Just make sure to tell them you need it.
There’s one final thing to remember about high risk insurance companies. There’s no need to stay in them if you don’t have to. If you’ve been continuously insured and haven’t had an accident or claim in a few years, you don’t need to be there. A good insurance agent or broker will review your coverage periodically and let you know when it’s time to go back to the standard company. If you don’t have a good agent, it’s time to shop around.
Assigned Risk: Can’t Get High Risk Insurance?
But what happens when not even high risk insurance companies will insure you?
If you can’t get insurance with an insurance company, you have to get it from the state – also called the assigned risk pool. Since even the worst drivers are required to carry automobile liability insurance in all 50 states, it follows that they have the right to obtain that coverage.
Assigned risk means the state government takes the driver and assigns him to an insurance company that does business in that state. That company is then legally required to write a policy on that driver.
The state in turn subsidizes the program and sets the premium, which protects both the insurance company and driver to a certain degree. This allows even the worst drivers to legally stay on the road, at least until their driver’s license is revoked. Assigned risk is also expensive, and the coverage available is sparse, but for some drivers it’s the only option.
One nice thing about auto insurance is that nothing is forever. Most insurance companies only consider the last three to five years of a driving record. This means even the worst driver who has no hope of obtaining insurance outside the high risk pool today can eventually repair his or her record and go back to the standard company and its cushy safe driver discounts.
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