Paying more each month for high-risk auto insurance is on par with getting a root canal. (okay, maybe not that bad, but still…) but don’t give up hope! There are a few things you can do to improve your auto insurance situation and get back on the right track.
We’ll walk you through the ins and outs of high-risk auto insurance: how much it costs, what makes someone high-risk, and most importantly, what you can do about it if you are.
Reading: What is high risk auto insurance
Insuring some drivers costs more. as a teenager who just got the license from him. Or your 71-year-old Uncle Eugene. Or his friend who hasn’t had car insurance in seven years while using public transportation in Chicago. or his cousin Earl who has a history of four speeding tickets in the last two years. all of these types of drivers are considered high risk.
So what exactly puts someone in the high-risk category? and how can you stay off that list? let’s dive!
what is high risk car insurance?
Okay, high-risk auto insurance (also known in the industry as non-standard auto insurance) is the coverage you should buy when an insurance company decides you’re at higher risk for an accident and file a claim than the average driver. Simple, right? it’s a category outside of a standard car insurance policy.
There are many reasons why an insurance company would consider a driver to be high risk. (driving barefoot is not one of them). and there are also insurance companies that don’t insure high-risk drivers, which means having an insurance professional on your side is very important if you fall into this category.
So what kinds of things do insurance companies look at to determine if someone is high risk?
who needs a high risk insurance policy?
There are some high-risk factors that are out of your control, like your age or if you haven’t had a car in a while (like living in a big city). you could be citizen of the month with a spotless record and those things would still count. but there are some things you can control. (more on that in a second).
Here are some groups of people that insurance companies consider to be high risk:
- teen drivers
- first-time drivers
- drivers over 65 years old
- drivers with expired coverage
- drivers with no credit or bad credit
- drivers with moving violations
- drivers with convictions for dui or dwi
- drivers with other serious violations
Let’s take a closer look at each one.
When you turn 16 and get your driver’s license, you are automatically considered higher risk than an experienced adult driver. But there are some things young drivers can do to get lower premiums, like get good grades in school, not get traffic tickets, and avoid accidents. if you maintain a clean driving record, your premiums will gradually decrease until you are 25 years old.
If you’re the parent of a teen driver, adding them to your insurance is one way to save money on your insurance, unless you wreck the family minivan and cause your premiums to go up. but let’s not think about that.
let’s face it: if you live in manhattan or any other big city, owning a parking space can cost as much as rent in other cities, and you can take the subway to get almost anywhere. if that’s the case, there’s simply no reason to have a car. And if you’ve never owned a car, why bother getting a license? But if you’re moving to the suburbs, it’s time you started driving.
If you’re an adult over the age of 25 and just got your license, insurance companies will consider you high risk.
We hate to break it to you, but just as you may be too young to be considered low risk, you may also be too old. While your insurance premiums gradually decline as you age 25, they begin to rise again once you turn 65. Unfortunately, drivers age 65 and older accounted for 6,907 traffic deaths in 2018. That’s 19%. of all traffic deaths that year. that’s one of the reasons why drivers in this age range are considered high risk.
Maybe you used to have a car, but then you moved to the big city and didn’t need it anymore. or you went to college and got around on foot or by bike. There are many legitimate reasons why you didn’t keep your car insurance. But now that you need it again, your premiums may be higher than you remember because you haven’t had coverage for a while. don’t worry. If you drive safely and stay out of traffic court, your premiums will eventually go down!
look, we know this is silly, but we have to say it: if you end up without a fico score, you may have higher premiums. we know. it’s stupid. But if you’re debt-free, don’t sign up for a bunch of credit cards just to get a FICO score. The FICO score says nothing about your finances other than that you love debt. you end up paying billions of dollars in interest to save a couple hundred dollars on car insurance. don’t swap one version of stupid for the other.
And sadly, if you have bad credit, insurance companies will hold that against you and consider you a higher risk than insuring someone with good credit.
Hey, we don’t make the rules. we just tell it like it is.
slow down! Speeding was a factor in 26% of all traffic deaths in 2018. That’s 9,378 people who died in car accidents because someone was going too fast. therefore, it is not surprising that receiving speeding tickets can affect the amount you pay for insurance. And if you get too many tickets, an insurance company will put you in the high-risk category. If you get too many speeding tickets or other moving violations (like running lights) in a five-year period, your insurance company will get the message that you’re expecting an accident. (let’s face it: this is probably an accident waiting to happen). then, they will increase their rates. For the sake of your own well-being and your insurance premiums, slow down and be careful.
Look, drinking and driving is a terrible and dangerous thing. There is no other way to say it. you could kill someone. you could kill yourself not worth it. get a designated driver, call a taxi, or use a rideshare app to get home.
on top of all that, getting a dui is the fastest way to be labeled a high risk driver. And insurance companies can go back three to five years (and even up to 10 years in some states) to check for DUIs on your record. If you are convicted of driving under the influence, you will need to obtain an SR-22 certificate from your insurance company stating that you meet the minimum financial responsibility requirements to obtain the insurance coverage required by law. Your insurance company has to file the SR-22 before you can reinstate your driver’s license, and some states will require you to carry an SR-22 for many years. In alaska, it is five years after a first DUI conviction and increases with each offense after that. after a fourth conviction in alaska, you have to carry the sr-22 for life.
so again, don’t drink and drive!
Infractions such as road rage incidents, hit-and-run accidents, and speeding will get you downgraded to the high-risk category. so relax! Driving can be stressful, so do your best to relax during your trip. maybe listen to the ramsey show and hear the reassuring sound of dave yelling at people who rented a car. (Okay, maybe that’s not exactly relaxing, but hearing a debt-free scream can put just about anyone in a good mood.)
In all seriousness, the way you drive can send your premiums skyrocketing and cause you even more stress when you sit down to budget. take it easy and get home safe and sound.
how much does high risk car insurance cost?
The amount you’ll pay for high-risk auto insurance varies from state to state. it also depends on your driving record, age, credit, and all those other things we listed above. but definitely expect to pay more, sometimes a lot more.
For example, someone with multiple DUIs on their record can expect to pay much more than they normally would. on the other hand, those with minor infractions, such as a ticket for talking on the phone while driving, will pay only slightly more. But again, there are many factors that go into high-risk auto insurance, and quotes vary widely depending on people’s circumstances.
Now that we’re done with the bad news, here are a few ways you can potentially lower your high-risk auto insurance policy.
how to reduce your high risk car insurance
You can’t help how old you are or if you’ve had a spell without a car, but there are some risk factors you can work on to lower your high-risk auto insurance premium.
- be a safe driver. this is a smart plan for you, other drivers on the road, and your wallet. slow down, stop texting, don’t drink, and drive—these are some of the basics that can save you a lot over time.
- wait. dents in your driving record don’t go away overnight. you may have to wait from several years to more than a decade for some violations to remove your record. Also, most companies will not remove accidents and violations from your policy record before you renew with them. in the meantime, your goal is to be a safe driver and not add new violations.
- ask for forgiveness. Note that we said most companies won’t remove those dents before renovating, but there are exceptions! Upon request, some companies will remove accidents and violations prior to renewal, which could further lower your premium. You have nothing to lose and everything to gain just by asking!
- block it. Some companies offer car premiums that are locked in and will never go up (a great solution for people over 65).
- pay your bills on time. bad credit can actually increase your annual car insurance premiums. That’s right: Not paying your electric bill on time or letting credit card bills pile up can negatively affect what you pay for car insurance. set a budget as early as possible and stick to it.
- Take a defensive driving course. This is for all of our first time drivers, teen drivers, or drivers getting back on the road after their last policy expired. check with your insurance company and see if they will give you a discount for completing a defensive driving course.
When you’re a smart and safe driver, it’s worth it. Just because it’s high risk today doesn’t mean it will be forever. In the long run, you have more control over your insurance premium than you think. And good agents have strategies to help you lower what you pay for car insurance. That’s why it’s so important to have a top-tier agent!
need a high risk auto insurance quote?
we got it. Things happen. perhaps you are in one of the age groups considered high risk. and everyone makes mistakes. if you do yours when you’re behind the wheel, you still need car insurance. And because many insurance companies may not even sell subprime insurance, it can be hard to know where to turn.
The good news is that you can get help from our team of trusted, independent insurance professionals called Local Endorsed Providers. these agents can search for the best deals on subprime insurance, or any other type of car insurance! our professionals are rock stars, have the heart of a teacher, and live in your community, so they know all the laws in your state and how they affect your insurance premiums.
find an elp today!