What is High-Risk Auto Insurance?
High-risk car insurance is required for certain drivers that possess factors that classify them as "high-risk." Both vehicle type and driving history can play a role in determining whether a driver falls into this category, and higher risk factors are typically reflected in higher car insurance premiums.
What determines whether you are a high-risk driver?
There are a number of factors that may determine whether you are a high-risk driver and most insurance companies make similar considerations in determining what kind of insurance a driver needs. In general, individuals fall into the high-risk insurance category when there is a higher likelihood that the insured will file a claim. An insurance carrier might consider a driver to be high-risk if the driver is:
- A new driver, or a driver elderly age
- Has had a DUI Conviction
- Has traffic violation on record, especially recently
- Has been involved in a serious motor vehicle accident
- Has had a lapse in car insurance coverage
How is high-risk auto insurance different from typical car insurance policies?
Car insurance companies have the right to refuse coverage to drivers in most states, but given that car insurance is a legal requirement, there is a need for high-risk car insurance policies. The biggest difference between high-risk car insurance and standard car insurance policies is the cost of coverage. Drivers may be required to pay the entire premium up-front and obtain higher coverage limits. Additionally, high-risk policies may have limitations or exclusions on who can drive the vehicle, such as excluding coverage if the driver involved in an incident is under the age of 25. While liability insurance is the most basic kind of insurance on the market, it will not cover your own injuries and expenses. High-risk insurance policies often require both comprehensive and collision coverage, in addition to liability.
How much does high-risk auto insurance cost?
Some high-risk factors will raise your rates more than others, and this increase frequently depends on your specific insurance company as each insurer utilizes its own formula to assess risk. Generally, a conviction of driving under the influence has the potential to double the price of your standard rate while two or more speeding tickets have a median increase of 35%, according to carinsurance.com. For accidents involving bodily injury, expect rates to go up by 37% and for individuals with bad credit, up to 69%.
While high-risk car insurance costs more than standard insurance, there are ways that drivers can avoid requiring this type of coverage. Practicing safe driving habits, including driving more cautiously and avoiding accidents, can result in lower rates over time. Choosing to drive a safer vehicle can translate to lower insurance costs as well. Acceptance Insurance offers various insurance policies – including auto insurance for high-risk drivers - that provides customers with excellent coverage at great value. Get your quote for a high-risk auto insurance policy today!
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