What You Need to Know about High Risk Car Insurance

When your car insurance company agrees to cover you, they’re essentially making a bet.  That bet is that the money you pay them over the years will be greater than any settlements they may have to pay out, either to you or on your behalf. As such, they do everything they can to hedge that bet. If you prove to be a high risk for them, that makes you a liability. In fact, some insurance companies won’t cover high risk drivers at all, but only those whose records are completely clean. For those who do provide high risk car insurance, it generally costs an arm and a leg.

What makes a high risk driver, and how do you lower your own risk to your insurance company, in order to secure a lower rate? Here’s what you need to know.

High Risk Car Insurance Factors

The most common risk factor is an accident. If you’re found to be at fault in a collision, it goes on your driving record, and your car insurance rate goes up. How much they increase depends on how serious the accident was. If you were speeding, driving under the influence, or breaking some other traffic law at the time, your premiums will likely go up even more.

On the other hand, some insurance companies offer accident forgiveness. If you’ve otherwise proven to be a safe driver, but have one accident, they may wipe it off your record and allow your rate to stay the same.

Even if you’re not in an accident, certain things can label you a high risk driver. If you’re pulled over for speeding, or some other traffic citation, it will likely make you a higher risk—though in some circumstances, you may be able to wipe it from your record by going to traffic school. Likewise a DUI or DWI will make you very high risk, and stay on your record for 10 years or more.

Financial factors can contribute to high risk car insurance as well. If you have bad credit, or are required by the state to file an SR-22 form (proving you’re financially stable enough to afford your insurance), those can contribute to your risk factor. Or if you simply have a rare or valuable vehicle, or one with highly specialized parts, the risk goes up, simply because any damages would be more expensive for the insurance company to cover.

Reducing Your Risk

If you are labelled a high risk driver, it’s not the end of the world. Often there are ways to lower your risk factor and get a lower rate. Taking a course in defensive driving, for instance, looks good on your record. These courses teach you how to be more aware of your surroundings and actively avoid dangerous situations in your car. They also help you avoid stress, fatigue, road rage, and other negative factors that can negatively impact your driving. These skills will make you a better driver and less likely to get into an accident, thus lowering your risk and your rates.

Aside from that, lowering your risk largely takes time and patience. Most car accidents, as well as traffic citations will stay on your record for around three years. More serious violations, such as a DUI or hit and run, will last longer than that. But if you can wait it out, and drive safely and carefully in the meantime, eventually, your risk will go down again. Your rates will be lower, and you’ll be easier to insure. By putting in the time and effort to lower your own risk, you create a safer bet, both for your insurance provider and for yourself.

Contact us to find out more about how to lower your risk and get a lower car insurance rate!