For some drivers who may have negative items on their driving records, it’s important to know the difference between assigned risk and non-standard auto insurance. Both of these fall in the category of high-risk auto insurance. Drivers may need to seek out high-risk auto insurance options if anything on their record elevates their risk assessment, whether it’s a DUI/DWI, an accident where they were at fault, or a history of claims.
Assigned risk is insurance of the last resort, and if you have been put in an assigned risk pool it will probably result in a much higher premium. Assigned risk insurance allows drivers to continue to drive legally even though they no longer qualify for traditional insurance.
To understand assigned risk auto insurance, you need to know about basic liability insurance. Basic or limited liability auto insurance policies are required by the state where a driver registers a vehicle. These policies cover the costs of accidents where the policyholder may be at fault. All drivers have to purchase this kind of auto insurance by law but for some drivers, this can be tricky. Consequently, calls to auto insurance companies often result in rejections specifically because of high-risk assessments.
This is why the states sometimes use an assigned risk system where they assign a high-risk driver to a certain auto insurance company. That company is forced to take the driver in however they can use high-risk assessment parameters to calculate premiums.
There are many ways to end up as a high-risk driver. It could result from multiple DUI’s, accidents or a large number of speeding tickets. It can also be because of a large number of points that have accumulated on your driver’s license. However people get there, they are no long insurable.
Non-standard auto insurance is not like assigned risk. It’s simply a different kind of insurance product for higher risk drivers. Some standard auto insurance companies offer non-standard auto insurance options while others specialize in insuring high-risk drivers. Depending on state insurance laws, non-standard auto insurance policies might be part of a tiered system where high-risk drivers have a better chance acquiring a policy, though with a non-standard or higher premium payment.
What this means for the high-risk driver is that he/she has options for getting the necessary auto insurance to operate a vehicle. Drivers impacted by their driving history should look at both of these options as available and make financial decisions about what kind of policy to go with. It might seem that assigned risk policies would always be more costly, since the company is forced to take on a driver, but this is not necessarily true. Each auto insurance company has their own metrics and calculations.
Additionally, some auto insurance companies might see the long term, where a high-risk driver gradually becomes a better (lower) risk based on a continuing, clean record. That’s why it pays to talk to either kind of company; the non-standard offer insurer or the insurer that is assigned to you, to see where your benefit lies.
While being put in an assigned risk pool is expensive, at the very least it allows high-risk drivers to have insurance coverage until they manage to get their driving record back in order. Decide whether basic liability is enough or whether you need collision or comprehensive coverage for your vehicle. Make good decisions for better results in the case of a claim.