Understanding High-Risk Automobile Insurance
High-risk car insurance, also called non-standard auto insurance, targets drivers who pose a risk to the insurance companies due to one reason or another. The problem of searching for a standard insurance policy will be extremely hard to come by if you have accumulated several traffic violations, accidents or serious infractions. High-risk insurance providers,like those offering non standard auto insurance, understand this niche market’s needs and cater specifically to drivers with past issues.
Keep in mind that high risk does not mean hopeless instead, it simply allows you to remain legally insured while you work on getting your record in a better place. Even though the premiums may be extreme, being covered is always better than the alternative legal and financial consequences of driving uninsured.
Factors that Boost Insurance Premiums
Below are the several factors that contribute to higher insurance premiums, placing you in the high risk category:
- Frequent traffic violations: Speeding tickets, running red lights and other violations indicate recklessness to insurers. Since each of these infractions signals potential risks, you become more expensive to insure.
- Accidents: Being ruled at fault in accidents raises your risk profile. A few small accidents may informally tell your insurance company that you are likely to file more claims in the near future.
- Driving Under the Influence: Convictions of DUI or DWI will bring in legal implications and raise premiums significantly. Severe driving offenses may lead to policy cancellation.
- Poor Credit Score: Most insurance companies base their assessment of risk on credit scores. A poor credit score leads to higher premiums because such a score denotes both financial and behavioral irresponsibility.
Knowing such factors will not only identify areas of improvement but also work out appropriate remedies such as, attending traffic school to remove minor infractions or work on improving your credit score.
Alternative Insurance Options
Fortunately, there are several other insurance alternatives designed for high-risk drivers:
- Assigned Risk Plans: In every state, there is an assigned risk plan available for drivers who are unable to obtain insurance by standard means. These plans gather high-risk drivers together and spread the risk across multiple insurance companies within the state. However, the drawback is that these plans come with higher premiums reflecting the increased risk involved.
- Usage-based Insurance Model: Premiums are based on real driving habits and not just on historical information about risk. Insurance providers use devices or mobile-based apps to track the driving behavior of an individual, factoring in speed, hard braking and the number of miles driven. It is effective because safe driving habits are incentivized with lower premiums, making it attractive for high-risk drivers who are willing to prove they can do better.
- Pay-As-You-Go Insurance: Great for those who don’t use their vehicles often this type of insurance is based on how much you drive. It provides a lighter workload for minor users while still offering sufficient coverage.
Reducing Your Cost of Insurance
Even if you are rated as a high-risk driver, here are some practical steps that you can take to minimize insurance costs:
- Improve your driving record: Defensive driving classes wipe out small infractions on your driving record. Practice safe driving so that no further violations occur. As time goes on, a clean driving record will also include lower premiums.
- Always shop around: This is because each insurance company uses its own metrics to determine the level of risk and significant differences may be realized in the premium paid.
- Bundle Policies: You may want to consider bundling your auto insurance with other types of coverage including homeowners or renters insurance. Most insurers will offer substantial discounts if you purchase multiple policies.
- Keep a Good Credit Score: Work on improving your credit score. Pay your bills on time, reduce debts already taken and keep low balances in credit cards. A better credit will surely lower premiums as it is used as an indication of risk.
Final Thoughts
It’s possible to find affordable car insurance even if your driving record is less than perfect. Understanding the options available and taking steps in a strategic manner can help you work through high-risk car insurance even to the extent of reducing some costs over time. Consider various policies available and find one that best suits your situation and driving habits. With due diligence and commitment, it is possible to improve your standing and eventually make your way to standard premiums on insurance.