How to Find Affordable Insurance for a High-Risk Driver

Any driver can have an accident or get a speeding ticket, but if you have too many such mishaps on the road, your auto insurance company may consider you to be a high-risk driver.

That can drive up your insurance rates or worse — insurers may refuse to renew your policy. Although nearly all states require drivers to carry a minimum amount of car insurance, carriers have the right to deny coverage if they think you represent too great a risk.

If no insurer will sell you a policy on the commercial market, your state department of motor vehicles may send you to an assigned-risk pool, where policies are far more costly.

If your state doesn’t have a high-risk pool, it will be up to you to find a “nonstandard insurer” who will take on the risk of providing coverage at a higher-than-normal price.

First, drive right

The best way to avoid being labeled a high-risk driver is make sure you to have a good driving record by driving safely.

“That is one of the best factors to help you get affordable insurance,” said Carole Walker, the executive director of the Rocky Mountain Insurance Information Association. “Having a lead foot or getting a lot of tickets for moving violations could push you toward having to shop for a high-risk insurer.”

Insurance companies review driving records before they issue policies and typically place drivers in one of the following categories:

• Preferred drivers: These motorists get reduced rates because they have good driving records and no traffic citations.

• Standard drivers: These may have received some traffic citations, but overall have good driving records.

• Nonstandard drivers: These may have had numerous accidents or citations. If you are considered to be a nonstandard driver, your car insurance costs can double, said Kevin Foley, a New Jersey insurance agent.

Typically, states require insurers to provide coverage for drivers in the high-risk pool who otherwise would not be able to buy policies. Each insurer who does business in the state is issued a share of the state’s risky drivers based on the number of car insurance policies they issue.

Start with the commercial options

To save money, first explore the commercial market. Only after exhausting that option should you pursue coverage through an assigned-risk pool, recommends Amy Bach, executive director of the United Policyholders consumer advocacy group in California. Small companies that specialize in high-risk drivers sometimes can offer lower rates.

“Try to go through the competitive market first to see what you can get,” she said. “You definitely want to compare what they offer to what you can get through an assigned-risk plan.”

People who have trouble improving their driving can ask their insurer to install a device in their car to monitor their driving, she added. These telematics devices monitors and records such things as how fast you drive and how hard you apply the brakes. If the devices show that you are consistently practicing safe driving, you may even qualify for an insurance discount.

Once you’re in the high-risk pool, you’ll want to get out of it as soon as you can. Insurers typically use a point system to rate various claims, traffic violations and accidents. You can ask your insurance carrier how long it may take for the points to drop off your record so you can qualify for a standard policy.

Other factors that may drive up your insurance costs

Not all drivers who are considered high-risk have bad driving records. Insurers may charge you extra for your policy for a variety of reasons, such as:

• Being a young person with no driving history. Experience counts when it comes to pricing car insurance. Teens statistically are among the riskiest drivers on the highway.
• Allowing your insurance policy to lapse. Insurers consider this to be a sign of risky behavior.
• Driving cars with powerful engines. High-performance cars tend to generate more claims, said Kevin Foley, a New Jersey insurance agent. “The power of the car is factored into your insurance rates.”
• Residing in a community where there are more traffic accidents than average. Even if you’re a great driver, where you live will be factored into your insurance costs.
• Having credit problems. Studies show that people who don’t pay their bills on time tend to file more insurance claims, said Foley.

Keep looking for a better deal

Whenever you find yourself paying high vehicle insurance costs, you remain free to look for a better deal, said Janet Ruiz, a spokeswoman for the Insurance Information Institute. If you’re able to improve your driving record, eventually a carrier will sell you a standard policy, although it could take several years, depending on your driving record.

“Keep shopping and comparing each time you are up for renewal,” she said.

What’s your experience getting a deal on auto insurance? Share with us in comments below or on our Facebook page.