WEDNESDAY, APRIL 28, 2021
Auto insurance rates are primarily determined by your risk of filing a claim. The more likely you care to cause an accident or file a claim, the more you will generally pay for auto insurance. This is because the insurer raises rates to offset the risk of you filing a claim that they have to pay out. Your driving experience, age and gender can all affect your risk level and thus the cost of your auto insurance.
One way to avoid paying higher prices is to reduce your chances of becoming a high-risk driver.
It is important to know what is considered a truly high risk driver so that you can avoid becoming one and paying too much for auto insurance.
Determining Which Drivers are High-Risk
Most insurance companies determine who is a high risk driver differently. Some might use your credit score as a factor, while others will use your age. Essentially all of them will use your driving history as a risk factor.
Nonetheless, there are still various drivers that most insurance companies consider high-risk. If you fall into one of these categories, you might pay more for your insurance coverage.
New or Teen Drivers
Many people lump new drivers and teen drivers into one high-risk category. However, these two groups are not always the same.
A new driver can be anyone who recently learned to drive. There is no age limit. These drivers do not have the experience of seasoned drivers. Therefore, they pose a higher risk of accidents and other hazards on the road. As experience increases, a driver’s risk may decrease, and an insurance company may lower a driver’s rates.
Since most teen drivers are new drivers, they usually face most of the same risks. Research also shows that teen drivers are more likely than older drivers to have accidents or commit driving violations. Their risk level is often compounded because of their age.
Like teen drivers, older drivers also face a higher risk while driving. Age might begin to impact faculties like vision, reflexes and concentration. This may cause insurers to classify older drivers as high-risk.
Most drivers in the U.S. have to carry auto insurance. Most states set minimum insurance coverage limits that all drivers have to carry. If you fail to carry your state’s minimum insurance, you could face financial penalties.
Since going without insurance is illegal, drivers should not let their policies lapse. If you fail to carry insurance, many insurance companies will classify you as a high-risk. Most insurers remind their policyholders to renew their policies within ample time.
Poor Driving Record
Almost every insurer looks at driving records when determining rates and issuing coverage. Drivers who have a poor driving history represent higher risks in the eyes of their insurance companies. Therefore, they are a greater cost burden. Insurers routinely raise premium prices, or even decline coverage for drivers who have experienced:
A record of speeding tickets or reckless driving charges
SR-22 requirements, which are certificates that verify for states that high-risk drivers have insurance
Most insurers don’t look at your entire driving history, only that of the last few years. If your insurer sees your record improve, it might remove your high-risk classification. Therefore, they might lower your prices. The safer you drive, the more likely you are to save money on your insurance rates.
Some insurance companies take a driver’s credit into account when determining risk. A poor credit score might signal that a policyholder might not reliably pay for the coverage. Therefore, a high-risk rating may result for the policyholder.
Not all vehicles can receive standard insurance coverage. Certain cars have excessive or unique value. A normal auto policy might not provide high enough coverage levels for those cars’ needs.
Classic vehicles, or custom-built cars might need excessive insurance because of their operational risks and values. This may mean an insurer has to classify the driver as high-risk in order to improve the driver’s coverage.
How Do You Insure Yourself as a High-Risk Driver?
One company might offer you more affordable coverage if it assigns you a different risk level than another. Therefore, it is always best to compare policy options when getting auto insurance.
While you may still carry a level of risk with one company, it may be lower than the risk you carry with another. Your independent insurance agent can often compare policies based on your driving risks. They can help you pinpoint affordable coverage. Furthermore, your insurer may offer discounts even if you are a high-risk driver. You might qualify for student, auto-payment or loyal customer discounts. That way you can save coverage in spite of your extra risks.
Work with your insurance provider to remain covered whether you are high risk or not so that you can drive without worrying about paying too much for basic coverage.
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