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High-risk auto insurance, also called nonstandard auto insurance, is the kind of coverage offered to drivers who are considered by insurance companies to have an above-average risk of getting into accidents.
The Most Common Categories of High-Risk Drivers
- Teenage drivers: Drivers in their teens, who have only recently received their licenses, are considered to be much riskier behind the wheel than an average adult driver. However, even teen drivers can lower their insurance premiums by keeping their grades up and avoiding any traffic violations and accidents. Keeping a clean driving record usually means that your rates will keep dropping until you’re 25 years old.
- Beginner drivers:Dave Ramsey mentions that adults over the age of 25 who are still driving beginners are seen by insurance companies as presenting a higher risk. Most people in this situation lived in large cities and had plenty of other options to get around, therefore not needing a vehicle.
- Drivers over the age of 65: Although auto insurance costs tend to go down as you pass the age of 25, they usually go up again once you’ve hit 65. This is mostly due to the fact that old people tend to get into more serious traffic accidents, with NerdWallet reporting that 18 percent of all traffic fatalities in 2017 were caused by drivers 65 and older, a disproportionate amount when considering the number of over-65s in the nation.
- Drivers with pauses in their coverage: There can be many reasons why you stopped having auto insurance coverage for a while, but once you need it again, you may discover that the rates have gone up significantly. The only way to get them back down is usually by having a few incident-free years on your record.
- Drivers with bad or no credit: Per Equifax, drivers without a good credit score usually have significantly lower insurance costs than those with bad or no credit. That being said, trying to artificially improve your credit score is not likely to result in lower overall costs, as you’ll simply replace auto insurance costs with credit card interest costs.
- Drivers with traffic violations: Moving violations like speeding are responsible for over a quarter of all U.S. traffic fatalities, so getting a speeding ticket can significantly affect your insurance costs. Also, other moving violations, such as running a red light, have similar effects. On the other hand, avoiding such traffic violations can show your insurance company that you are a safe and responsible driver that presents low risks of creating damages.
- Drivers with DUIs or DWIs: Having a DUI or DWI on your driving record is one of the biggest factors that lead to an increase in your car insurance premium, along with reckless driving violations.
- Drivers with various serious driving offenses: According to ValuePenguin, traffic offenses such as hit-and-runs, going more than 20 miles over the speed limit, road rage, and other similar incidents can immediately put you into a high-risk category.
Insurance Coverage For High-Risk Drivers
A The Zebra analysis reveals that the insurance companies with the lowest six-month policies for drivers who committed an at-fault accident are:
- USAA: $767
- State Farm: $810
- American Family: $884
The best average costs for a six-month policy following a DUI are:
- American Family: 823
- Progressive: $919
- State Farm: $940
The best average six-month policy costs for drivers with poor credit scores are:
- GEICO: $903
- Nationwide: $785
- Farmers: $1179
How to Save Money on High-Risk Auto Insurance
Consider these ways of saving money if you are considered to be a high-risk driver:
- Be careful before filing a claim after a collision. Although drivers buy collision coverage to be able to repair their vehicles after a collision with another vehicle or object, in some situations the cost of repairing the damages out of pocket can be greater than the increase in your insurance premium, meaning that you are better off fixing the car yourself.
- Complete a defensive driving course. Although doing this won’t lower your insurance premium if you already have a violation on your record, taking a defensive driving course can lower your insurance costs in the future, according to the National Safety Council. Besides, what you learn during the course can help you avoid future accidents and tickets.
- Work on your credit score. Every move up from one credit bracket to the next can lower your insurance costs by as much as 17 percent.
- Let your violations expire. Know exactly when your violations expire and contact your insurance company afterward to make sure that you are not being charged for an incident that has since expired off your record.
- Don’t drive for a while. If you are a high-risk driver and may soon stop being able to pay for ever-increasing auto insurance costs, you may consider finding alternative means of transportation for the time being.
- Compare multiple quotes. Not all insurance companies have the same penalties for high-risk driving, so comparing multiple offers can help you find a good deal for your situation.
What Are the Best Auto Insurance Companies for High-Risk Drivers?
The car insurance companies with the best rates for drivers considered to be at a higher risk than average are:
- GEICO
- Progressive
- 21st Century
- Kemper
- Dairyland
- Direct Auto Insurance
- Gainsco
- The General Insurance
- Infinity Insurance
- National General Insurance
- Bristol West
- Safe Auto
Although high-risk drivers usually pay significantly more than other drivers, with an average insurance cost of $1427 per year, there are still several ways in which you can lower your insurance costs. The most relevant factors that go into calculating your car insurance costs, besides your perceived amount of risk, are your gender and location, along with several other factors, such as the type of coverage you prefer.
Being a high-risk driver can be a very costly thing, as most insurers will require you to pay very high premiums if they are to take a risk on you and offer you coverage. However, if you do some research and look around for the most appropriate insurance offer for your personal characteristics, you may be able to lower your insurance premium.
Sources:
The Best High-Risk Auto Insurance Companies
The Best High-Risk Auto Insurance Companies
Best Car Insurance Companies for High-Risk Drivers & How to Lower Your Rates
The Best High-Risk Car Insurance Companies
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