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How High Risk Drivers Affect Auto Insurance Rates
If you have experienced a hike in insurance rates, you may be interested in how a high risk driver assessment changes an auto insurance policy. There are many different effects that a high risk driver can have on a policy. Finding out about some of them can help you make the best decisions for controlling costs after negative events have bumped up your insurance rates.
Types of High Risk Drivers
People that have accumulated a large amount of traffic violations in a relatively short time are often dropped from their traditional insurance plan and required to buy a high risk policy.
If you are found guilty of a serious violation like reckless driving or DUI, you’re probably going to be required to purchase high risk insurance like SR-22 under your state’s driving laws.
If your license is suspended for any reason that can put you into a high-risk category. That includes suspensions for non-payment of fines. Even though it may seem like it’s not fair to consider yourself a high-risk driver just because you didn’t pay fines, insurance companies sometimes will take it as an indicator that you’re just not a responsible person.
Young people obtaining their policies for the first time are considered a high risk just because they aren’t experienced drivers that that makes them more likely to be involved in an accident. People who have let their auto insurance coverage lapse are put into this category as well; insurance companies take it as a sign that you’re not responsible.
State Auto Insurance Systems
Some of the effects of a high risk driver on a policy have to do with the way your state does business. The state in which the driver or household is registered (and where the car is garaged) has developed its own system of auto insurance values based on a few basic options. One is a tiered auto insurance system, where high risk drivers simply get bumped into a higher category for policy and premium rates. In other states, less sophisticated systems may make it hard for a high risk driver to get affordable coverage at all.
Some Options for High Risk Drivers
When a high risk driver assessment has been added to a household’s auto policy, and the rates have skyrocketed, it’s time to shop for competitive insurance. One way to do this is with assigned risk pools. Some states have developed these assigned risk systems to basically help drivers get covered that may have a hard time finding an insurer on the open market. The driver can contact the state, and the state will assign an insurance company to cover the driver who is considered high risk.
Another option is to look for non-standard auto insurance. This is basically a product developed for high risk drivers. Some companies offering non-standard auto insurance are mainstream insurers. Others specialize in this kind of policy for those who have negative events on their driving record.
Managing Risk in Auto Insurance
If you do have a person in the household who is now considered high risk, remember the factors that lead insurers to raise risk assessments fade over time. That means at some point in the ftuure, you’ll be able to renegotiate for lower rates. In the meantime, having that high risk driver assigned to a less valuable vehicle can help. Be willing to cover that driver for higher rates in the short term, while keeping an eye on future premiums and renegotiating with the insurer every few months. Ask the insurance company about when they will consider lowering the risk assessment.
