What You Need to Know

Like most states, Rhode Island requires all drivers to carry auto insurance to operate a motor vehicle on state roadways. Drivers who are unable to qualify for conventional auto insurance can apply to participate in the Rhode Island Auto Insurance Plan.

What Is the Rhode Island Auto Insurance Plan?

Established in 1968, the Rhode Island Auto Insurance Plan (RI AIP) is, according to ValuePenguin, an assigned risk plan that guarantees that high-risk drivers meet the state’s minimum insurance requirements. These are drivers that most insurance companies would deny conventional coverage. If an insurance company wants to operate in Rhode Island, state law mandates that they participate in the RI AIP. As ValuePenguin notes, that means every auto insurance company has to provide coverage to a portion of the state’s high-risk drivers. The state determines a provider’s portion based on that company’s market share in Rhode Island.

How to Participate in the Rhode Island Auto Insurance Plan

There’s a good chance that you qualify for the Rhode Island Auto Insurance Plan. According to QuoteWizard, these are the steps needed to participate:

1. Confirm you’ve been denied coverage in the voluntary market. You have to prove that multiple auto insurance providers have denied you coverage with the last 60 days before applying to participate in the RI AIP.
2. Submit your application. Once your application is in the pool, the RI AIP will assign you an insurance provider. These are the same providers that operate in the state on a voluntary basis.
3. Your assigned provider initiates your policy. The policy you purchase through the Rhode Island Auto Insurance Plan is similar to a minimum-coverage policy that you would purchase in the voluntary market. However, you’ll pay higher rates than drivers who purchase conventional auto insurance. Your coverage under the RI AIP expires three years after it’s assigned to you.

Keep in mind that your application to the Rhode Island Auto Insurance Plan might be delayed or denied in certain situations. According to ValuePenguin, the reasons for denial include:

• You owe money to an insurance provider for an unpaid premium.
• You haven’t submitted your vehicle for a physical damage inspection to ensure that there is no pre-existing damage.
• You make false statements on your application or you leave out relevant information.

While a Rhode Island Auto Insurance Plan policy costs more than conventional insurance, you may pay less than your fellow Plan participants. That’s because each insurance company is allowed to use the same formula to calculate rates that they use in the voluntary market. The same factors that affect insurance rates in the voluntary market also affect RI AIP rates.

QuoteWizard notes that Rhode Island Auto Insurance Plan participants have the same payment options as other drivers. These include:

• Paying the full premium when you submit your application
• Paying a deposit of 30 percent of the premium cost, then paying the remaining amount within 30 days of the policy issuance
• Paying a 15 percent deposit, then paying off the policy in nine monthly installments, with a $5 charge each month

Insurance Requirements for Rhode Island Drivers

Whether you purchase auto insurance on the voluntary market or through the Rhode Island Insurance Plan, you must meet the minimum coverage requirements mandated by state law. That means, according to QuoteWizard, when you purchase an insurance policy, it must include the following:

• $25,000 bodily injury per person per accident
• $50,000 bodily injury for all persons per accident
• $25,000 property damage liability
• $25,000/$50,000 uninsured/underinsured motorist coverage (bodily injury)

While uninsured motorist coverage for property damage and coverage for medical payments are optional, if you add these types of coverage to your policy, they must meet the following minimums:

• $25,000 uninsured motorist property damage
• $3000 medical payments coverage

While Rhode Island does not require drivers to carry any sort of collision or comprehensive coverage, Einsurance recommends that you add it to your policy to protect you from monetary loss. You might also want to raise your liability coverage limits.

Rhode Island drivers must carry proof of auto insurance whenever they operate a motor vehicle, and they have to present that proof whenever a police officer requests to see it. According to Einsurance, failure to provide proof of insurance coverage can result in the following:

• A $500 fine for first and second offenses and a 3-month driver’s license suspension
• Revocation of registration and license plates, in some cases
• A $1000 fine for the third offense and a possible 1-year jail sentence

How Much Does Auto Insurance Cost in Rhode Island?

According to AutoInsurance.org, Rhode Island drivers pay, on average, $720 a year for liability coverage and $377 a year for collision/comprehensive coverage. That’s higher than the national average of $377 a year for liability and $122 a year for collision/comprehensive. The Zebra notes that Rhode Island drivers pay more for auto insurance because the state has a high number of uninsured drivers. Plus, the data shows that insured drivers in Rhode Island tend to file more claims. Because car maintenance costs are higher in Rhode Island, it costs more for insurance companies to pay out claims.

As AutoInsurance.org notes, there are ways to lower the costs of your insurance premiums. They recommend you do the following:

• Talk to your agent about available discounts. Most insurance companies offer bundling discounts, good student discounts, and safe driver discounts. You might also earn discounts for your military service or professional affiliations.
• Eliminate any unnecessary coverage. For example, if you drive an older car, you might be paying more for comprehensive/collision coverage than what your vehicle is actually worth. In that case, it’s actually cheaper to pay for repairs or replacement out of pocket than pay comprehensive coverage premiums.
• If you’re shopping for a new policy, compare quotes from various companies. Because each provider has its own formula for calculating rates, prices vary from one provider to another.

In a quote analysis, The Zebra found that State Farm and Travelers typically offer the lowest rates in Rhode Island.

Check this out if you need additional information, resources, or guidance on car insurance.

Sources:

Rhode Island Automobile Insurance Plain – RI AIP | valuepenguin.com

What is the Rhode Island Automobile Insurance Plan (RI AIP)? | quotewizard.com

Rhode Island Auto Insurance Guide | einsurance.com

Cheap Rhode Island Car Insurance | thezebra.com

Rhode Island Auto Insurance [Rates + Cheap Coverage Guide] | autoinsurance.org

Comprehensive Insurance: Everything You Need To Know | caranddriver.com

Can You Get Car Insurance with a Suspended License? | caranddriver.com

Car Insurance | caranddriver.com


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