Some drivers may really need help with their driving as they cannot help but get into accidents and pick up traffic tickets. Such drivers should look into taking advance or defensive driving courses before they get into a serious accident. Some local authorities may offer an option to take a defensive driving course instead of taking action against drivers caught driving dangerously. This would be a great opportunity to take if you are ever offered.
Some fairly good drivers can run into troubles as well. What makes you a bad driver is the frequency of picking up accidents and traffic tickets. You may have been driving with no problems for ten years and suddenly you have couple of unlucky crashes and traffic violation citations. Now you are a bad driver who will have a hard time of finding cheap auto insurance for a while. It takes some time for your records to clear and claims stop affecting your rates.
How Are Drivers Categorized?
Risk is one of the most important factors in vehicle insurance premium calculations. Companies can classify risk in many ways depending on many factors like age, gender and driving history. Drivers can be categorised based on their driving records as below according to Insurance Information Institute III.
PREFERRED: These would be the drivers any insurance company would be happy to offer the best rates. They would have spotless DMV records, no claims for years and even have great credit score.
STANDARD: Insurance companies would still love to insure them but may not offer the best rates because their records aren’t exceptional. They have clean records and no claims but don’t have long enough records or there is something in their history if you go long enough.
NON-STANDARD (High-Risk): These are the drivers that have had several crashes and scrapes with traffic laws. They may have several claims and traffic tickets or one big issue like causing an accident by reckless driving or Driving under the Influence of alcohol or substance. Most of these high risk drivers will be able to find insurance coverage even though they are likely to pay a hefty premium.
ASSIGNED RISK: These are the drivers who are so bad that they cannot find insurance in the open market. They will need to talk to their State Department of Insurance to be allowed into “assigned risk” programs. It is a system that requires each licensed company to accept certain number of uninsurable drivers within the state they operate. However, drivers need to prove that they tried hard but have been refused by several companies or premiums quoted were far too expensive.
What Else Can Push Drivers into High-Risk Category
You may fall under high-risk category even if you don’t have serious problems with your driving like above. These factors may not put you in the “assigned risk pool” but they will be influential enough to increase your car insurance rates as much as twice in some cases.
EXPENSIVE TO INSURE CARS: Certain cars with big engines like sports cars, SUVs and 4x4s are more expensive to insure. With powerful engine they can speed fast and can cause larger damages. Having one of those automobiles alone can double your premium.
EXPENSIVE TO INSURE ZIP CODES: It is more expensive to insure cars when you live in a city zip code as compared to country or suburb. Cities are highly congested and have higher auto crimes which results in higher premiums. You can see your premium double when you move to one of those expensive zip codes.
YOUNG AGE + NO RECORD: Having no driving experience or insurance records is enough to raise your premium. That is why it may not be a good idea to allow your policy lapse more than 30 days. The premium would go up even further if you are a teenager as well as a novice driver. Vehicle insurance is probably the only reason why you wouldn’t want to be a teenager as your premium can double or triple.
BAD CREDIT HISTORY: An automobile insurance company cannot deny insuring you because of your bad credit score but they can quote you high enough rates by applying surcharges. For example, having a really low credit score (as a result of bankruptcy, credit judgement or debt collections) would be enough for many companies to apply a 30% surcharge.
What to Do when You Are Classified as High Risk for Car Insurance
You probably know why the insurers are quoting you high premiums. If you don’t, you can ask them why. Your current insurer has to tell you why your rates have gone up. Here is what you can do when you realize you are grouped in with the high risk drivers.
SHOP AROUND: Companies are largely free what they want to charge each applicant as long as they base their rates on risk rather than discrimination. You won’t be able to complain about high quotes in most cases because you are free to choose out of many carriers. If most of them are offering you high premium it is probably because of something you have done. There is a high chance there will be one or two companies with affordable rates in comparison to the rest. You will find them if you look long and hard.
TRY TO QUALIFY FOR OTHER DISCOUNTS: Having higher rates because of one the above reasons does not prevent you from qualifying for other discounts. For example, you may have a terrible recent driving history but have an excellent credit score. So, you should look for companies that offer the highest discounts for good credit history. Also, you can get vehicle insurance discounts that are not related to driving. You can get them for paying the premium at once, being a member of AAA (or other recovery service providers) or having a private overnight parking. While the other factors have premium increasing effects these other discounts will have premium decreasing effects.
BUY PAY AS YOU DRIVE CAR INSURANCE: These policies would be great for people who are normally good drivers but have been unlucky recently. Also, it will work like a magic for good young drivers. Auto insurers will be able to confirm that you are indeed a better driver than your recent history suggests looking at the data collected by the device they install. Actually, many people confirm in the surveys that they have become better drivers because they knew their driving was monitored.
THINK ABOUT YOUR CAR: If you are a high risk driver you don’t want to add salt to insult by having a high risk car as well. So, think about the car you drive and see if you can drive a modest automobile at least until your records improve.
What to Do If You Are Denied Auto Insurance?
When so many insurers refuse to provide cover or quote it may mean that you are uninsurable in the open market conditions. Then, you need to contact your State Department of Insurance to be considered for Assigned-Risk pool. They will explain to you how you should go about contacting the companies that participate in this scheme.
There is good news for bad drivers who want to improve. If you keep minding driving and stay out of trouble your records will get cleared over time. If you can keep claim and traffic violation free within the next year your premium will go down a lot. You can actually take advance or defensive driving courses to improve driving. If you want to go this route you should first check which courses may qualify you for discounts as well.