Anticipating the risk you pose
High Risk Insurance Companies
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Insurance providers always anticipate and account for risk before they grant you insurance. Given that you are a high-risk driver, insurance companies may not consider you an ideal candidate. Your car insurance rates are majorly dependent on how much of a risk an insurance company thinks you may be while on the road, but there are also some non-driving red flags that are considered too. Fortunately, you still the chance to enhance your driving record and lower your risk to qualify for better insurance rates.
3. Speeding tickets: Based on the severity of the traffic offense, the insurance risk of a ticket varies. Less severe offenses such as speeding do not affect the insurance premiums that much, but this may not always be the case. Speeding tickets are viewed as precursors of dangerous accidents, leading to increased insurance rates. After getting a ticket, the amount of premium you are charged can go up by $155 after 6 months, $309 after 1 year and $926 after 3 years.
4. Racing: Auto racing exposes drivers to many dangers; therefore the insurance rates are very expensive. Drivers who face racing violation charges may be charged an extra $1,045 per year, $523 per 6 months or $3,135 per 3-year period for car insurance following the incident. Racing on public roads is never a smart choice.
5. Driving under the influence (DUI): Another driving violation that is considered a high risk factor is driving under the influence. DUIs lead to more payouts in bodily injury, property damage and death benefit claims than any other risk factor. Regardless of where the accident happens, your premium rate can increase by 40% if you are charged with driving under the influence, and this is not inclusive of extra fees and legal ramifications. After a DUI the average increase in premiums may be $529 at 6 months, 1.057 at 1 year and $3,171 at 3 years.
Non-Driving Factors that make you a High-Risk Driver
There are very many factors that influence auto insurance rates, and some of them are not related to your behavior while on the road. Below are some of the non-driving factors commonly used by insurance firms to calculate your risk premium.
Bad Credit and Car Insurance
To an insurer, your credit score reflects the sort of driver you’ll be. Research by FTC indicates that drivers with poor credit scores tend to file insurance claims more that those with better credit. When drivers with bad credit file claims, they result in more costly payouts. Insurance companies guard themselves by charging high premiums whenever a risk is involved.
The average annual premium charged is about $2, 411 for poor credit, $1,934 for below fair, $1,571 for fair, $1,323 for good and $1,130 for excellent credit. Fortunately some states like California, Hawaii and Massachusetts do not follow the practice of using your credit score to calculate your auto insurance premium.
How Age Affects Rates
When it comes to driving, youth is normally equated to being inexperienced, which means more risk. Insurers view teenage drivers as high-risk candidates because of their short driving experience and raised possibility of filing claims.
Location and Zip Code Factors
Since insurance premium is determined by your zip code and regulated by the state, where you live affects your auto insurance rates. Staying in no-fault insurance states can affect your insurance premium despite your driving history. For example Michigan charges a premium of $2,087, Delaware charges $2,073, Oklahoma charges $1,990, Kentucky charges $1,925 and Texas charges $1,762. Flood-prone, accident-prone and driver-dense regions charge higher premiums to cover the extra risks.
Many states employ the ‘points’ system to score traffic offenses. Every offense is connected to a certain number of points that remain on your driving record for some time depending on the state you live in and the severity of the offense. If you gain a particular number of points, you may lose your driving license.
How Insurance Records Affect Auto Insurance
In most cases, gaps in your car insurance history are considered red flags by insurers. Drivers who have uninterrupted car insurance records with great coverage levels are considered as being more financially responsible than those with interrupted records. If your insurer vies you as being financially responsible, they’ll charge you a significantly lower premium.
Some insurance companies will turn down drivers who have failed to maintain continuous insurance coverage for last 6 months.
Vehicle uses and Effects on Insurance Coverage
How you use your car can affect your insurance rates. Given that you use your automobile for rideshare or business purposes, your insurer may deny you cover outright depending on the risk. Driving in high-density places, or driving more miles can increase the premium you will be charged. For instance, driving on a farm may incur a premium of $1,248, $1,475 for commercial driving, and $1,335 for work/commute for less than 10 miles.
Types of Vehicle Can Affect Your Rates
A high-performance vehicle is viewed as an added risk by insurers. Vehicles that can attain high speeds, have rare/valuable parts, or can off-road are considered risky investments by insurance providers. For example, a Chevry Cruze Sedan has an average yearly premium of $1,376; a Toyota Tacoma truck has a premium of $1,363; while a Honda CRV SUV has a premium of $1,232.
Saving on High-Risk Auto Insurance
There are several things you can do to save on high-risk vehicle insurance such as:
Taking a defensive driving course: It is always smart to take this course before the ticket charge is reported to your insurer. This solution will not help you if the ticket has already been put on your record, but it is worth considering if you are thinking of signing up for a costly class. Skills you learn from a defensive driving course can actually help you to become a defensive driver; therefore you will avoid citations and accidents.
Try to improve your credit score: Improving your score from bad to excellent can actually save you at least $1,200 per annum on vehicle insurance.
Keep up with the expiry date of any violations: It's important for you to know when your violations will expire. When the expiry date reaches, get in touch with your insurance firm to make sure you are not still being charged for the violations past the expiry date. Insurance rates are re-run every 6 months but given your violation ends before that time, you should contact your insurance directly. It is likely that the rate will not be changed if you don’t let them know.
Shop around regularly: As a high-risk driver, you need to shop for auto-insurance every 6 months. If the reason for being considered a high-risk driver is because of non-driving factors, this is an important consideration. Factors like age will change; therefore you should evaluate the available car insurance options regularly to secure more savings.
Try to go vehicle-free for some time: If you are tabbed as a high-risk driver, you are going to be charged higher premiums for your car insurance. Given that you cannot manage to pay for your vehicle insurance at the moment and can get by with public transport or a bike, you should try to go vehicle-free for some time.
It's illegal to drive without insurance coverage; therefore this is may be a great solution if you have no other choice and need to save up on money.
Car Insurance for High Risk Drivers
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Where Can I Buy High Risk Auto Insurance?
Assigned risk may be your answer
Where to Purchase High-Risk Vehicle Insurance
To be granted Assigned Risk Insurance, you have to prove you have attempted many times and failed to acquire insurance because of your poor driving history. Once that occurs, the last insurance company you try will take a report to the state to let them know that you require Assigned Risk Insurance. You should, however, note that Assigned Risk Insurance is usually costly.
Even if you are too risky for an insurance firm, you can still shop around to find affordable high-risk car insurance. Compare quotes to find the best option for you.
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