What to consider when shopping for high-risk auto insurance
Fact-checked with HomeInsurance.com
Insurance companies prefer to insure people with a clean driving record. Drivers who don’t have a history of accidents or traffic violations get rewarded with a lower premium because those drivers are less likely to file a claim.
Not everyone has a perfect driving record. Those drivers still need insurance, but they may not be able to afford a higher standard insurance premium. So, what is their best option of car insurance for bad records?
High-risk car insurance is a type of insurance policy designed for high-risk drivers. High-risk insurance allows drivers to get covered without paying huge premiums for insurance.
What is high-risk auto insurance?
High-risk auto insurance, sometimes called nonstandard insurance, is insurance for high-risk drivers. That includes drivers who have a history of accidents, traffic violations or frequent claims.
It’s much riskier and more expensive for insurance companies to insure high-risk drivers. A driver who has shown a consistent pattern of poor driving behavior is classified as high-risk, which means their premium will increase significantly. Some drivers may eventually lose their coverage altogether.
Drivers can also be labeled as high-risk based on certain demographics. For example, the youngest and oldest drivers tend to be higher risk than other drivers. A teen driver who just received their license and who has never had insurance before will pay a higher premium. Insurance companies also deem drivers with a poor credit score as high-risk.
If you’re purchasing insurance for the first time, the insurance company will evaluate factors like your driving record, age and credit score to determine your risk. If you fall into the high-risk category, the insurance company will most likely offer a nonstandard insurance policy.
There’s virtually no difference between standard and nonstandard insurance policies besides the price. The high-risk insurance cost will be higher. These two policies offer similar coverages for drivers with the option to purchase endorsements.
Most major auto insurance providers sell nonstandard insurance policies. However, you can also get high-risk insurance through a smaller company that specializes in high-risk driving insurance. Like all types of insurance, it’s important to shop around and get multiple high-risk auto insurance quotes before settling on a provider.
Are you a high-risk driver?
When you purchase auto insurance, the insurance company looks at several factors to calculate your rate. That includes where you live, your claims history, your age, your credit score and the type of car you drive. Insurance providers look for certain red flags that make you a high-risk driver.
If you’ve experienced one or more of the violations below, you could be labeled as high-risk:
- Hit and run
- Road rage
- Excessive speeding
- Being at-fault in an auto accident
- Having multiple violations
Additionally, you could be labeled as high-risk if you fall into one of these categories:
- Being a teen driver
- Being over 65
- Being a first-time driver
- Having gaps in insurance coverage
- Having poor credit
What to consider before buying a high-risk car insurance policy
High-risk car insurance will provide basic coverages, like collision, comprehensive and liability. You can also choose to add coverage for things like roadside assistance or total replacement cost. However, there could be some limitations to your policy and you might have trouble finding cheap car insurance for bad driving records.
For example, your policy may not cover any other drivers who operate your car, even if you give them permission. This would extend to spouses, children, friends and extended family members. With standard insurance, anyone who you allow to drive your car is covered.
Also, your driving record may be reviewed more often. With standard insurance, your driving record gets reviewed once per year when adjustments to your premium take effect. If you are a high-risk driver, your insurance provider may keep close tabs on your record to ensure you’re not continuing bad driving behavior.
Lastly and most importantly, a high-risk policy may not cover punitive damages. For example, if you’re responsible for an accident and you get sued for the damages, your insurance company could refuse to cover you if you lose the lawsuit. That means you would be responsible for paying the damages and legal expenses entirely out-of-pocket.
How to buy auto insurance with a bad driving record
If you’re a high-risk driver, don’t shy away from purchasing car insurance. You can expect your policy to be much higher than standard insurance, but it’s well worth the cost. Without insurance, you could face serious consequences and even go to jail.
The process of buying high-risk car insurance is the same as it would be for a standard policy. You can request a quote through a major provider or look into smaller companies that specifically sell high-risk policies. Because high-risk insurance is expensive, you’ll want to get multiple quotes to determine which company will offer the best rate.
It’s also important to shop around because you may qualify for certain discounts. For example, drivers who pay their policy in full, have certain safety features installed in their car or take a defensive driving course may qualify for a lower premium.
If you maintain good driving habits, you’ll eventually be able to transition to a standard insurance policy and save money. However, reversing a poor driving record takes commitment to becoming a better driver. If you continue to file accident claims or get marks added to your record, your nonstandard insurance premium will keep increasing.
- High-risk insurance is designed for high-risk drivers with a poor driving record.
- High-risk insurance is similar to standard car insurance, but it’s much more expensive.
- Nonstandard insurance is available through most major insurance carriers and smaller companies that specialize in high-risk policies.
- High-risk drivers should get multiple quotes to find the best rate.
Being a high-risk driver with a bad driving record can make it difficult to get car insurance. Even drivers who are younger, older or have a poor credit score can be deemed high-risk. A nonstandard insurance policy allows high-risk drivers to get covered without paying huge premiums.
There is almost no difference between standard and nonstandard policies, although nonstandard insurance may have some limitations to be aware of. With a nonstandard insurance policy, you’re still covered for the basics, like collision, comprehensive and liability. If you commit to cleaning up your driving record, you can eventually switch back to a standard policy and save money.