A major factor in how insurance companies determine your car insurance rate is your risk. Being a high-risk driver can make it difficult to find a company that will cover you, and it’s often expensive when you do find one. Read on to explore cheap car insurance for high-risk drivers.
What Is A High-risk Driver?
Although some insurance companies may have different standards for what makes a driver high risk, there are several common factors they consider. Here are some examples of what might make someone a high-risk driver:
Drivers With Multiple Violations
Driving violations, such as at-fault accidents and speeding tickets, can have a major impact on whether companies consider you high risk. Some violations are more costly than others. For example, a DUI can almost double your rates, while driving with expired registration might only raise them a minor amount.
Here are more examples of other violations that can increase your insurance rates:
- Leaving the scene of an accident, also known as a hit and run
- Driving with a suspended license
- Driving recklessly
- Not stopping at a red light
- Making an illegal turn
- Making an improper pass
Young or First-Time Drivers
Teen drivers or drivers of any age who recently got their license can be liabilities to car insurance companies. This is because they may not have the experience to navigate tricky driving situations and might have risky driving habits. If possible, it’s a good idea to add a teen or first-time driver to the existing insurance policy of a more experienced driver.
Drivers With Poor Credit Scores
Not all insurance companies take credit scores into account when determining rates, but many do. They consider drivers with poor credit scores to be more likely to file a claim, which is more expensive for the company. If you have a low credit score, you may want to consider comparing companies and, if possible, finding one that won’t check your credit.
Drivers With Lapsed Car Insurance
If an insurance company sees that your car insurance lapsed, they may consider you unreliable or financially unstable. There are some insurance companies that might not agree to cover you at all if you’ve been without insurance for a long time. This can include insurance lapses for voluntary cancellation, not just because of a failure to pay your premium.
How Is a High-risk Car Insurance Policy Different From Others?
Other than usually being more expensive, there are a few differences between high-risk car insurance policies and standard policies. High-risk policies may come with less coverage and fewer benefits. You may also have to be careful about who you allow to drive your car, as companies might deny claims where a driver who isn’t named on your policy is involved. Another major difference is that the insurance company is likely to check your driving record whenever you renew your policy to make sure you don’t have any new violations.
What Are the Cheapest Insurance Companies for High-risk Drivers?
According to ValuePenguin, these insurance companies offer the cheapest average rates to high-risk drivers:
- Geico: $2,478 per year
- State Farm: $3,510 per year
- The General: $4,356 per year
- Allstate: $5,158 per year
How Can a High-risk Driver Lower Their Risk?
A high-risk driver status doesn’t have to be permanent. Here are a few ways you can lower your risk and liability, making it easier to get more affordable car insurance:
Take Driving Safety Classes
Check with your insurance company to find out if they offer discounts for drivers who take defensive driving or driving safety classes. Insurance companies that offer these discounts usually provide a list of approved courses. Completing one of these courses can lower your risk or provide an insurance discount that helps to counteract the higher cost from being a high-risk driver.
Improve Your Credit Score
Improving your credit score can lower your risk and, if it’s high enough, can even get you further discounts. This can be a slow process, but a pattern of improved credit and regular premium payments may show insurance companies that you’re not a liability. Methods for raising your credit score include paying bills on time, having a high amount of available credit on any credit cards, and avoiding requests for credit increases on cards.
Get Good Grades
For young drivers, a great way to lower your insurance rates is to do well in school. There are many insurance companies who offer good student discounts to young drivers with high grades. They consider doing well in school to be a sign that you’re more likely to be a responsible driver.
New driving violations can raise your rates or even make it difficult to renew your insurance policy. To lower your risk, it’s important that you avoid getting into accidents, drive within the speed limit, and overall practice safe driving habits. As with most methods of reducing your risk, you might find this can take time, but a pattern of safe driving with no violations can encourage an insurance company to remove your high-risk status.
Maintain Your Insurance
If you’re considered a high-risk driver because of lapsed car insurance, then the solution to your high-risk status is time. It may take up to six months, but if you can continue paying your premiums regularly, your insurance company may stop considering you a liability and lower your rates.
Bundle Your Insurance
While this might not lower your risk, one way to offset the cost of being a high-risk driver is to bundle your insurance. You can often get a discount by buying your car and home insurance through the same company. If you don’t own a home, you might also be able to bundle your car insurance with insurance for a boat, motorcycle, RV, or ATV.
What Are Other Insurance Options for High-risk Drivers?
Sometimes, the normal insurance companies just won’t cover a high-risk driver. It can become necessary to seek other options, such as state-sponsored insurance plans. To learn about your state’s sponsored plan, visit the Automobile Insurance Plan Service Office (AIPSO) directory.
Another option is to find a nonstandard insurance company, which is a company that specializes in covering high-risk drivers. There are only a few national insurance companies that fit this description, including The General and Safe Auto. There may be significantly more nonstandard insurance companies available in your region.
Even as a high-risk driver, you have many options regarding car insurance. Knowing how to lower your risk and understanding your options can help you make an informed decision.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.