High Risk Auto Insurance: Cheap Rates for High Risk Drivers

June 25, 2013

Cheap high risk auto insurance sounds like an oxymoron. Sure enough, it's possible to find competitive rates among high risk car insurance specialists.

High Risk

Finding cheap high risk auto insurance is essential when you are keen to limit your budget for car maintenance and upkeep. When a driver or car is considered high risk by an insurance company, the policy holder must be aware of how to lower premium rates, which will be above average.

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Additional Driver
Rather than seeking out an individual insurance policy, a high risk driver should consider obtaining a policy that is linked with another driver. If you live in a household with another driver, a policy can be obtained to cover both parties, which may reduce the ultimate cost.

It is possible to make yourself a less high risk driver by making some concessions. Accepting an increased deductible will help to reduce the cost of a claim, which can make an insurer more comfortable in putting a policy in force for what would normally be considered a high risk driver. Offer to accept a policy which limits the number of miles you travel in a given period. This will often be sufficient to convince insurers that the level of risk will be reduced.

Type of Car
High risk car insurance is often required when a policyholder drives a powerful or high-end car. Amend this by opting for an average car that has a good safety record.

Check Your Record
In order to get the best quote, you need to know exactly what is on your driving record. Call up the Department of Motor Vehicles (DMV) and find out the details of any violations. Pay any outstanding fines, and make sure that the DMV updates your record. Ask them for any advice about improving your driving and getting out of the high risk bracket.

There's also something known as a C.L.U.E. report, which details past insurance claims. Insurance companies have been known to use faulty data to raise risk ratings for drivers, so it's good to be vigilant about how you look to insurers on paper.

Driving School
Take a course in advanced or defensive driving, as these will increase your driving skills and lead to discounts from insurers. Before you begin a course, make sure it is recognized by insurers, otherwise you will be wasting your money. There are a large number of courses available, but not all of them conform to the required standards.

Check for Discounts
Some insurers offer discounts for credit union members or account holders with specific banks. Being a high risk driver does not make you ineligible for these discounts. Ask the customer service adviser at the insurance company what discounts are available.

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Does Your Auto Insurer Have Accident Forgiveness?
Even the smallest routine auto accident can leave you with staggering insurance costs. To help remedy this, some auto insurance companies have begun offering accident forgiveness. If you are involved in an accident, the auto insurance company agrees not to jack up the rates unnecessarily, but to use a more complicated menu of factors to tally up reasonable premium costs according to risk rating. Without accident forgiveness, the insurance company can simply claim that the individual is a high risk driver, and spike the rates when it's time to reapply at the end of a coverage term.

Seek Alternative Coverage
In most states, high-risk drivers who have been quoted extremely high rates by conventional auto insurance companies, or even denied coverage, have some options. One is an assigned risk pool, where some states maintain a system to force a company to cover a high-risk driver. There's also a market for what's called "nonstandard auto insurance," where companies cater to a driver with a higher risk rating.

Garage in a Lower Risk Area
Some high risk auto insurance or nonstandard car insurance is assessed according to where a company encounters the most claims. If you live in a high-claim area, garaging the car elsewhere may lower the risk assessment.

Work on Your Credit
Your credit history also goes into a high risk auto insurance assessment. Good credit can qualify an applicant for specific plans. Check out your credit rating and take steps to get it looking squeaky clean.

Compare Rates
Checking different car insurance companies is one of the best ways to find cheap high risk auto insurance. Using a price comparison website will help you to get a lower insurance rate by finding the company offering the cheapest quote. To get a lower insurance rate, you need to be in a position to provide the insurance companies will full personal and vehicle details.

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High Risk Factors
If you find yourself in one of the following situations you may be forced to carry high-risk auto insurance.

  • Convictions for driving under the influence or a suspended license will immediately put you into the high-risk category.
  • Extremely fast sports cars, highly modified cars, extremely expensive and rare vehicles may also qualify.
  • Numerous speeding tickets or traffic accidents (regardless of who is at fault) imply that you are more likely to get in an accident.
  • New and young drivers.
  • Poor credit. Statistics indicate that drivers with poor credit file more insurance claims, thus poor credit equals higher risk to the insurance company.
  • Continuously dropping your auto insurance and re-starting your policy.

How to Get Around Your Spouse's Bad Driving Record

If you're married and your spouse is a bad driver, since you're sharing an insurance plan, you're going to be penalized for his or her bad record. However, there are a few that can help mitigate your husband or wife's bad driving record. Here are a few simple changes that can save you lots of money on high premiums.

Unfortunately, this is the most important factor when calculating insurance premiums for someone with a bad record. Problems with your driving record show up when the insurance company requests your information from the Department of Motor Vehicles. Fortunately, after a period of time they don't affect the premium as much. In addition, many states enforce regulations that don't allow insurance companies to penalize drivers for tickets after 3 years.

Coverage Amount
Try raising your deductible on your comprehensive or collision coverage. A higher deductible means lower rates. This is a good option for someone who has a lot of tickets but not a history of getting into accidents. That's a driving pattern that may result in a high premium, but he or she may not be as likely to get in an accident. If your car is paid off and has lost a considerable amount of its value, you might want to drop comprehensive coverage completely. Paying a third of a car's value every year in insurance premiums doesn't make much sense. Just don't skimp on your liability coverage. You want to have as complete protection in case of a collision.

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Car Type
Changing the type of car your spouse drives may have a big effect on their premiums. It's one of the main components that an insurer uses to calculate the cost of coverage. Change the class of car your partner is driving from 2-door to 4-door, or sports car to sedan.

Driver Education
Oftentimes, insurance companies offer a price break to problem drivers if they attend a defensive driving course. There are also courses available that are specifically tailored towards speeders or especially aggressive drivers. However, remember that this price break is only offered once every few years. If your spouse goes to a class and his or her driving habits don't change, that's going to discourage your insurer to continue offering you this discount.

Separate Coverage
In a worst case scenario, where none of these seem to bring your premium down, your last ditch option is separating coverage. You can keep your current company, and transfer your spouse to a less traditional high-risk provider. Unfortunately high-risk insurers tend to cut costs by eliminating the extras that you would get through a traditional insurance plan (like roadside assistance or car rental coverage).

Being deemed high-risk means you pay more for coverage than the typical person. You are more at risk to get into an accident, get tickets or drive under the influence, according to the insurance company. If you are high risk and your record is improving, it may be worth the effort to shop for new insurance or speak with your agent after an appropriate amount of time to see if your rates can be reduced. By proving over a period of time that the risk to insure you has decreased, the insurance company will reduce your rates.

Related Questions and Answers

What are the Top 10 Car Insurance Companies in the U.S.?

The top 10 car insurance companies available in the United States today are listed below. The list is compiled based on affordability of their policies, their responsiveness, and the value of the services they offer. The top 10 list includes:

All of these insurance companies are based in the United States, and they offer almost any type of vehicle insurance policy imaginable today. All of these companies have websites that you can browse before contacting them about pricing and insuring your vehicle. Almost all offer the same types of policies as the others.

What is a Car Insurance Group Rating?

A car insurance rating group is not what most people think it is. In fact, it is not a group of insurance companies slapped together that are rated as the worst or best in terms of price and coverage. This type of group refers to the rating system used by car insurance companies when they need to determine a premium for insuring a vehicle. Insurance companies using this system classify cars with a rating in groups of 1 to 20. This rating system puts vehicles of all makes and models with each other based on similar characteristics of each vehicle.