High-risk auto insurance is designed to protect drivers who are new behind the wheel as well as those with a history of traffic violations or accidents. Insurance providers regard these individuals as “high-risk” because they’re considered more likely to file a claim.
If you’ve been deemed ineligible for a standard insurance policy, high-risk insurance may be right for you. This guide will help you understand this specialized coverage option, or you can search for a policy below.
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Understanding high-risk auto insurance coverage
Also known as non-standard auto insurance, high-risk auto insurance coverage is designed for individuals considered at higher risk for making an insurance claim. This risk can be based on statistical likelihood as well as a driver’s past behavior.
High-risk insurance premiums are usually much higher than standard policies because policyholders are considered to be a greater liability to the insurer.
What makes you a high risk for auto insurance?
Insurance providers may deem you as “high risk” if you:
- Have a history of moving violations or accidents
- Have no history of auto insurance
- Have a history of lapses in coverage
- Are a new driver with limited experience
- Have poor credit
- Drive a high-value vehicle such as a sports car
Any of the above criteria will indicate that you have a relatively high likelihood of insurance claims. Depending on your provider, you may not qualify for a standard policy, but you can still qualify for a high-risk policy.
What is covered by high-risk auto insurance?
Most high-risk auto insurance policies offer basic coverage such as:
- Liability insurance
- Collision insurance
- Comprehensive coverage
- Uninsured/underinsured motorist protection
- Medical payments/personal injury protection (PIP)
Some providers may also offer add-ons and customizations that include roadside assistance, rideshare coverage, and more.
What isn’t covered?
High-risk policies typically don’t extend coverage to:
- Drivers excluded from the policy
- Intentional acts or damage
- Commercial use
- Other drivers using the car without permission
- Certain acts of God
- Personal belongings stolen from the car
- International travel
Make sure to check your policy carefully for exclusions and other stipulations that could affect coverage.
How much is high-risk auto insurance?
Your high-risk auto insurance rates can vary by your age, insurance provider, credit score, and other important factors. Here’s a breakdown of the major factors influencing your perceived risk level and insurance costs.
Teen drivers
According to the CDC, teen drivers have a higher risk for automobile accidents and lack the skills to avoid risk-taking behaviors.
Car and Driver magazine states that the average insurance premium for two parents and a teen is $447 per month. For teens pursuing insurance on their own, the average annual cost is $8,108 for a 16-year-old female and $9,422 for a 16-year-old male.
Speeding tickets
Speeding tickets are citations issued by law enforcement for violating the posted speed limit. Even a single traffic ticket can raise your insurance rates. According to data from Forbes Advisor, a speeding ticket can raise your insurance premium by 24%, which comes to an additional $380 per year, on average.
Multiple accidents
Insurance providers often raise rates after an automobile accident. One report indicates that insurance premiums increase by $665 per year after a single accident. Filing multiple claims within a short time (such as a year) may cause your rates to increase still further, though it depends on the number of claims and their severity.
DUI
In many cases, a standard auto insurance policy is no longer an option after a DUI. Additionally, a DUI can raise your rates by 70% on average, so you can expect high insurance premiums with a high-risk auto insurance policy.
How to save on high-risk auto insurance costs?
While a high-risk auto insurance policy will be more expensive than standard coverage, there are still ways you can save on your insurance costs. Here are some tips on how to keep your rates as manageable as possible.
Maintain a clean driving record
Speeding tickets and accidents may raise your rates, but that also means that avoiding these incidents can lower them. The longer you can go without receiving a speeding ticket or getting into an accident, the more likely your insurance provider will be willing to reduce your rates.
Drive a safe and reliable vehicle
Sometimes, even the car you drive affects your insurance premiums. Sports cars, for instance, are harder to insure since they’re associated with more car accidents and cost more to repair. Driving a safe and reliable vehicle (a standard sedan, for instance) can keep your rates low and may help you avoid costly accidents.
Increase your deductible
You might be able to secure a lower monthly premium if you agree to a higher deductible. A deductible is the upfront cost you pay before your insurance coverage kicks in.
By agreeing to pay more upfront, your insurance provider will offer you lower monthly payments. Just make sure that you have enough money to cover a higher deductible.
Take advantage of available discounts
Ask your car insurance provider about any available discounts. Bundling home and auto insurance is a common way to save on both policies. And if you’re married, you and your spouse may find lower rates with multi-car policies.
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Consider taking a defensive driving course
Providers may offer discounts if you take a defensive driver course. Even if your insurance provider doesn’t make such accommodations, these courses can improve your ability to react and respond to roadway hazards, minimizing your risk of future accidents.
Improve your credit score
Your credit score will also affect your insurance rates. You can help improve your score by making consistent, on-time payments to your creditors, or consider using a credit builder loan to improve your credit score and bring your insurance rates down.
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Avoid filing small claims
When it comes to insurance rates, the fewer claims the better. If you’re in a minor accident with minimal damage, you may be better off paying out of your pocket rather than risk a rate hike from your insurance company.
Legally, most states still require you to report all accidents to your insurance provider. But when you can avoid filing a claim, this can save you money long-term.
How long does high-risk insurance last?
Car insurance companies typically look at the last 3 to 5 years of your driving record. Likewise, you can generally expect your high-risk policy to last 3 to 5 years, though some infractions (such as a DUI) may push this period to 10 years.
Reduce costs while improving your driving habits
High-risk insurance policies can provide coverage, even to those with a blemished driving record or little driving experience. While these policies will cost a bit more than standard coverage, following some of the above tips can reduce costs while also improving your driving habits.
FAQ
Are auto insurers required to insure high-risk drivers?
Insurance companies are not universally required to insure high-risk drivers. Some insurance providers specialize in high-risk policies, so compare rates to find a policy that’s right for you.
What determines high-risk or low-risk in auto insurance?
High-risk drivers are those with a higher likelihood of filing an insurance claim than the average customer. These include new or inexperienced drivers and those with a history of speeding tickets, accidents, or DUIs.
How long does a new driver typically pay for high-risk auto insurance?
New drivers might pay for high-risk coverage for 3 to 5 years, though this depends on the policy itself and the driver’s record.
