Auto insurance is a must for driving to demonstrate your financial responsibility. However, most insurance companies refuse to provide cover to high risk drivers because they anticipate recurring potential claims. There is always a way out – some insurance companies specialize in ‘high-risk’ or non-standard auto insurance.
Car Insurance for High Risk Drivers
The cost of high risk auto insurance is always much higher than the standard policies. This is to offset the high probability of claims from these policy holders.
Who are high risk drivers?
A driver is placed under the ‘high risk’ category for the following reasons:
1. Poor driving history with accidents, tickets or DUI violations: The insurance companies try to ensure that the driver who seeks insurance from them has a clean driving record as they can trust him to be the one with less likelihood of getting involved in an accident and making a claim. They also want to ensure that the driver is not a habitual offender with a high probability of making claims. Apart from that insurers know that people with DUI pose the highest risk and they would make sure that they do not incur a loss by paying for claims that are more likely. The insurance companies therefore leverage the high risk by charging a considerably higher price for the high risk category than others.
2. Poor credit score: Statistics reveal that people with poor credit history are more likely to file a claim with their auto insurance. The likelihood of a claim from these drivers is found to be more than others who do not have any credit problem. The insurers therefore raise the premium rate for such drivers when providing insurance cover. This is also because these drivers with poor credit are turned down by most leading insurers and their only resort is the non-standard insurance providers.
When a driver is found driving without auto insurance or with an invalid or expired auto insurance his driver’s license will be suspended by the Department of Motor Vehicle (DMV) of the state. The DMV requires the driver to obtain FR-22 filing from his insurer to get his license re-instated. FR-22 is required as a proof that the driver has auto insurance. The driver approaches his insurance company who may or may not provide insurance to him. In these circumstances he has to approach one the non-standard insurance companies who will insure him and also file FR-22 with the DMV to enable him to get back his driver’s license. The premium rate for this driver will be expensive as he is categorized as a high risk driver. The high risk drivers find it difficult to get auto insurance with the regular insurance companies and so the high cost. The FR22 stays in the driver’s records for many years which may affect his career and financial future.
OnlineAutoInsurance.com helps high risk drivers to get affordable and great auto insurance from leading auto insurance companies.