High Risk Auto Insurance

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If you become a poster child for high risk car insurance, because of speeding tickets, accidents, or DUI arrests, you’ll pay much more than good drivers for your insurance. However, if you search and compare rates, you will find more affordable costs for high risk auto insurance programs.

What is the usual definition of high risk drivers?

Insurance companies have a rather simple definition of high risk drivers: Those drivers who, based on their poor driving record, inexperience (age), or credit history, are risky to insure. When you look for cheap high risk auto insurance, you’ll learn this phrase is an oxymoron because cheap is a relative term. But, what is involved in compiling a “poor” driving record?

Here’s what makes you a high risk driver
high risk auto insurance

There are potentially multiple components of a “poor” driving record. The primary factors that cause drivers to qualify for auto insurance for high risk drivers include the following factors.

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  • Filing multiple (more than one recently) claims for loss“At fault” accidents are particularly damaging to your driving record. High risk auto insurance companies identify certain people, with a “propensity” to file claims, as high risk drivers.
  • Multiple moving violations, such as speeding tickets and traffic light disregard incidents. Drivers with a “lead foot,” as evidenced by their record of moving violations, typically move into the high-risk category. Most insurance companies treat these drivers as high risk insureds.
  • Inexperienced drivers. Primarily based on driver age, most high risk auto insurance companies classify, based on their actuarial statistics, drivers under 25 years old, particularly male drivers, get involved in more accidents than their older, more mature counterparts. Therefore, they typically pay high risk car insurance rates. First time drivers, regardless of their age, typically receive higher rates than other drivers (with a proven track record), and, often must get high risk insurance coverage because of their lack of driving experience.
  • DUI conviction, particularly with accompanying accidents and/or charges for “reckless” driving. DUI charges are serious violations. Charges are not enough to put you in the high-risk category. However, a conviction “qualifies” you. Most local and/or state police officers seldom file these charges without evidence that these drivers have ingested alcohol or medications making them unfit for having reaction times for safe driving. When law enforcement believes drivers are driving recklessly or have left the scene of an accident, the DUI charges often are amplified.
  • Insurance coverage lapse. If you’ve had your last insurance policy cancelled or you dropped it for any reason (even good reasons), you’ll likely pay higher policy rates and premiums. You will need to prove to your new company that you are a safe, responsible driver before you exit the high-risk category. Be aware that it could take at least six months to prove your value to your new company.

What States Have the Highest and Lowest Average Costs for High Risk Auto Insurance Coverage?

You might be thinking, who has the cheapest auto insurance? Well there is no answer. Costs for high risk car insurance policies vary widely depending on your state of residence. According to ValuePenguin.com, if you live in Michigan and you’re a high-risk driver, you may have already suffered “sticker shock,” with the highest average cost of high risk auto insurance, at over $2,750 a year. Michigan also penalizes you if you’re a young driver with high risk premiums at over $11,250 per year.

Except for the snow in Winter, you’ll be happier if you live in Maine, because this state has the lowest average high risk car insurance policies in the US, costing (on average) less than $590 per year. If you are a young driver (under 25 years old) in Maine, you’re considered to be an “inexperienced” driver and high risk. You’ll pay around $3,200 per year with most auto insurance companies.

Avoid getting charged with DUI plus having an accident in California. If you do, you’ll pay almost $7,800 a year. New Jersey drivers should be careful to keep their speed at or below posted limits, since those with speeding violations pay more than $6,550 for their auto insurance coverage. Drivers in Hawaii pay the least when they have speeding violations on their records, spending less than $1,100 and young drivers also pay the least, around $900. How much you pay will also depend on the type of coverage you buy; for example if you want full coverage car insurance  or no deposit car insurance you’re going to pay a lot more

Poor Credit Reports 

Those drivers with very low credit scores also often find themselves mired in high risk insurance pools. Insurance companies typically relegate these drivers into the high-risk category. Sure, unsatisfactory credit reports have little to do with your driving habits, but car insurance companies usually “mark up” your rates when you have credit report and credit score issues.

How to Find Cheap High Risk Auto Insurance Companies

Finding reasonable high risk car insurance premiums does not equal “cheap” rates. They simply do not exist for drivers classified as high risk insureds. Yet, there are ways to locate those insurance companies who believe drivers with poor driving records deserve a “second chance” to return to standard rates over time. Here are a few tips for taking advantage of these opportunities. Be aware, however, different states have varying views on high-risk drivers for insurance purposes (see above paragraph  for lowest and highest high risk premiums).

  • Shop, shop, shop tirelessly to find the lowest premiums. Take the time to get as many online quotes as possible. Depending on your state and driving record, it is impossible to know which insurance companies will offer you the most reasonable rates for high risk insurance coverage without taking this important step. The solution: Ask many companies to quote on your insurance.After you receive as many quotes as possible in your state, you can compare the costs to find the most reasonable ones for you. You’ll appreciate the time savings today’s Internet delivers. Most auto insurance companies offer interactive websites that will provide premium quotes on the coverage you need. You’ll save both time (instead of waiting on the phone to talk to a live human) and money (driving around getting premium quotes) from the comfort of your home. You will see the average cost of high risk auto insurance for states in the US based on four major company’s rates.

 

  • Remember, your status as a “high risk driver” is not a life sentence. You may be viewed as a high-risk driver now, but your status can change after you have proven you are a responsible driver. Sure, being convicted of DUI may last longer to keep you in the high-risk category, but speeding tickets or age-related inexperienced driver status will be removed as a high-risk indicator once you gain experience as a safe driver.Unless you continue the careless driving habits that placed you in the high-risk category in the first place, you can return to the standard rates you once enjoyed typically in around six months to one year. Your placement in this category will not follow you for a lifetime once you prove you’re safe when behind the wheel.

 

  • Use the available remedies to return to “safe, responsible driver” status. You can use this time to increase your credit score, taking formal driving classes, or, if you’re a student, earn good grades (premiums are lower for students earning good grades). Should you be convicted of a DUI, avoid drinking and driving at all costs. There is no reason to risk another conviction and license suspension. To get your license back after a DUI suspension, you need to file an SR22 form with your Department of Motor Vehicles (DMV), which is the highest risk category for car insurance companies when you attempt to renew your driving privileges.

 

Most of all, be careful when driving to avoid “at fault” accidents or speeding tickets. Never let your high-risk insurance policy lapse, as the cycle of high-risk auto insurance will start again.

Becoming classified as a high-risk driver by car insurance companies is expensive and debilitating. This classification can affect your bank account, driving privileges, and your job (if your license is suspended). Do you really want to pay twice or three times what your friends and family pay for auto insurance? We think NOT. Is it that important to you to risk your financial stability, driver’s license, or your job, by driving carelessly?

If you are a young driver and a college student, focus on achieving a good grade point average (GPA) – and driving safely – you will pay less as an age-related inexperienced driver. Do not allow your current auto insurance policy lapse for any reason. Do not speed or run red lights. It costs too much to become a high-risk driver, not to mention the increasing moving violation fees and costs.

Who has the cheapest auto insurance for high risk auto insurance?

The state-by-state study averaged premiums from four national insurance companies (GEICO, Allstate, Nationwide, and MetLife) to arrive at a blended average premium cost. Major car insurance companies use actuarial statistics to price their high-risk insurance coverage rates to keep from setting arbitrary rate structures. If asked, these companies can justify their insurance premiums based on factual loss ratios and paid claims data.

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