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High-Risk Car Insurance: Is It For You?

Jason Metz

High-risk auto insurance is for drivers who are more likely to get into car accidents and file claims. Auto insurance companies typically base this on driving history, inexperience behind the wheel and other factors.

When you're seen as a high-risk customer, it may seem hard to find auto insurance. But some companies focus on customers in the non-standard market. Here are some of the companies that specialize in insuring higher-risk drivers:

Am I a high-risk driver?

Your recent driving history -- often the last 36 months -- is going to be an important factor in whether you're judged as "high risk." Policies for riskier drivers are typically referred to as "non-standard" auto insurance. Car insurance companies typically look at:

  • Car accidents. If you've caused car accidents, your insurance company may expect you'll cause more. While causing one accident isn't likely to get you pegged as high-risk, causing multiple accidents might.
  • Traffic violations. One speeding ticket might lead to a surcharge, and multiple speeding tickets or other moving violations can push you into the non-standard market.
  • Driving under the influence (DUI). If you have a DUI or DWI conviction, car insurance companies are going see you as a risky driver.
  • Age and inexperience. If you're a teen driver or you're newly licensed, inexperience makes you more likely to have claims.
  • Foreign driver's license. If there's a lack of information about a U.S. driving history, you might be considered a high-risk driver.
  • Poor credit. In all states except for California, Hawaii and Massachusetts, auto insurers can look at your credit to help determine car insurance rates. Studies have correlated credit to the chances that you'll make an insurance claim. Statistically, people who have lower credit scores are more likely to file a claim, according to the Insurance Information Institute.
  • Drivers who want only minimum auto insurance. If you want to buy only the insurance required to legally drive, you might be considered high-risk.
  • A gap in auto insurance coverage. If you've ever been dropped or you canceled your car insurance without another policy in place, you have a gap in coverage. Car insurance companies often see this as higher risk.
  • Risky vehicle. Auto insurers consider not only the driver but also the car. If you have a high-performance car, for example, you're more likely to make a claim. Certain vehicles can put you in the high-risk category.

What is SR-22 insurance?

In some states, a high-risk driver may be be required to show proof of insurance to the state. This proof is often called an SR-22 or FR-44. These "financial responsibility certificates" must be filed by your insurance company. Reasons for an SR-22 can include:

  • Being involved in a car crash and not having auto insurance.
  • Driving with a suspended or revoked driver's license.
  • Major moving violation convictions such as reckless driving or driving while intoxicated.

Many small and large insurers offer SR-22 insurance. But if yours doesn't and you need an SR-22, you'll have to switch companies.

Lower your high-risk car insurance cost

If you're a high-risk driver, here are some steps you can take to lower your car insurance premium:

  • Focus on a clean driving record. Many auto insurers review the past three years of your driving history. Driving safely leads to fewer accidents and traffic violations and can result in lower car insurance rates.
  • Take a defensive driving class. You may be able to get points taken off your record by taking a state-approved driving course.
  • Improve your credit score. Over time, you can improve your credit and get better car insurance rates.
  • Ask about discounts. While you might be considered a high-risk driver, insurance companies offer a lot of car insurance discounts, including good student discounts, car safety discounts and discounts for buying more than one type of policy.

The last resort

If you've been denied auto insurance because of your record, you can buy insurance from your state's "assigned-risk pool." Auto insurers in each state must participate in the state's assigned-risk pool. While the premiums are generally higher, insurers in the pool must provide insurance. Contact your state insurance department if you're unable to find coverage.