At Risk Car Insurance
Getting car insurance can seem impossible with a poor driving record and sometimes difficult to get even with no driving infractions. Although your driving record is the main reason insurance companies may reject you, there are at least four additional reasons why you may find getting car insurance difficult. These reasons can include the type of car you drive, a brand new drivers license, no prior insurance record and the area in which you live. Regardless of the reason, your only option at this point is at-risk car insurance.
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Background
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Car insurance companies base acceptance of your application and the rates you pay on a level of perceived risk. Drivers with clean driving records pose little risk, generally have few problems getting coverage and pay "preferred" rates. One or two blemishes on your driving record will not usually make getting insurance difficult, but you may pay more in monthly premiums. However, when the risk you pose exceeds the limits your car insurance company is willing to accept, rejection, either in the form of dropping your current coverage or denial of a new application, is likely.
Non-Standard Car Insurance
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If you incur a serious driving violation, have a lapse in coverage or insufficient driving experience, your perceived level of risk may become unacceptable to qualify for or maintain insurance at preferred or standard rates, yet not bad enough to disqualify you altogether. In this case, some private insurance companies may agree to insure you under a non-standard insurance policy, either through the parent company or a subsidiary of the parent company. Non-standard car insurance policies generally offer the same levels of coverage as traditional insurance but at significantly higher rates, according to CarInsurance.com.
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Assigned-Risk Car Insurance
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Assigned-risk insurance exists to provide an option for drivers who present a level of perceived risk that makes getting car insurance in the voluntary or private market impossible. This option helps you meet insurance requirements for your state, protects you in the event of an accident and allows you to keep driving. The difference is that rather than applying to a specific insurance company, you submit an application through private insurance company, which forwards your application to a residual, or pool insurance program. The residual company then assigns you to a private insurance company, which by law must accept your application. This type of insurance is the most expensive type of car insurance, and the worse your driving record is, the more expensive your monthly premiums will be.
Considerations
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In contrast to other types of insurance, if you have an assigned-risk policy, you have the option to cancel the policy as soon as you can qualify for private insurance. Because regulations state that assigned-risk insurance providers only have to provide the minimum levels of your coverage your state mandates, InsuranceProviders.com recommends that you periodically apply for traditional insurance and change over as soon as you can.
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References
- Insurance Information Institute: What Can I Do If I Can't Find Coverage?
- State of Connecticut Insurance Department: Non-Standard Insurance Information
- CarInsurance: What is Non-Standard Auto Insurance?
- Automobile Insurance Plan Service Office: Residual Market Overview
- InsuranceProviders: What is Assigned-Risk Car Insurance?
- Photo Credit speed limit 25 image by Stephen VanHorn from Fotolia.com
