High-Risk Auto Insurance: Choosing Coverage For Risky Drivers

September 19, 2023

Auto insurance providers don’t issue policies just like that – they meticulously calculate risks for every coverage they offer, increasing the premium proportionally to the risk they face. For the riskiest drivers – ones from accident-prone states, with a bad driving record, or lacking of driving experience – providers offer high-risk car insurance, also known as car insurance for bad drivers. Whether you fall into a category of risky drivers or struggle to qualify for any other type of auto insurance, you may have no choice but to opt for high-risk auto insurance coverage as your only option. After all, you can’t drive legally in the United States (barring New Hampshire) without car insurance, not to mention having one will give you peace of mind on the road. Below is everything you need to know about high-risk car insurance.

High-Risk Auto Insurance and Its Features

As being said, auto insurers calculate risks when they set prices for their policies, with premiums increasing proportionally to the level of risk posed by a specific driver to an insurance company.

  • For example, all other things being equal, a young male driver with one year of driving experience and an already-rich history of claims will pose a much higher risk to an auto insurer than a middle-aged female with 15 years of driving experience and a spotless record.

In our example, the male driver may not even qualify for regular auto insurance but have only one option: high-risk car insurance that reflects a higher risk of insurance claims by a much higher premium and possibly some special conditions. Speaking of the special conditions with a high-risk auto insurance policy, most policies have three:

  • Limited nature: a limited amount of liability – in most cases, not higher than a million dollars – is typical for high-risk auto insurance.
  • Limited choice of providers. Not all auto insurers are willing to offer high-risk policies, which may require additional research on the driver’s side.
  • Higher cost: The difference between the cost of a standard policy and a high-risk one can be significant. Wanting to protect themselves from extra claims and payouts, auto insurers try to maintain a financial balance by raising the price of bad driver car insurance.

Who Needs High-Risk Insurance?

Sometimes it comes as a surprise for drivers to be assigned a high-risk group, mostly because there are many unobvious factors like, for example, location. To understand who can be offered high-risk driver auto insurance, familiarize yourself with the popular high-risk driving groups.

Novice Drivers

It’s natural that young drivers haven’t yet acquired experience in safely performing maneuvers and counter-emergency actions. In unpredictable situations on the road, many beginners hit the panic button, which often leads to dire consequences. At the same time, age is not necessarily a big factor if you have lots of experience. For example, a 25-year-old with five years of driving experience will likely get a lower premium than a 40-year-old novice.

Teenagers

Teenagers are generally considered riskier drivers for they usually lack driving experience, and their body chemistry pushes them towards rush and risky decisions on the road. This, of course, is being proven by statistics over and over again to eliminate any prejudice and preconception talks. On the bright side, if you are a teenager with significant driving experience, a clean driving record, and a safe car, you may not be considered a high-risk driver. Likewise, if you are a college student with high grades, you may even qualify for a car insurance discount, confirming that you are a reliable driver posing little to no risk for your auto insurer. Last but not least, another way to get cheap auto insurance for high-risk drivers is to add auto insurance to your parent’s policy.

Drivers Aged 65 and Over

Senior drivers – 65 and older – are also considered risky for the natural aging processes that impair clean driving. For example, older drivers generally have a slower reaction, reduced focus, and health problems, all leading to a higher possibility of an accident. But then again, generalizing may not always be the right thing, as you may be a clean driver who can successfully qualify for cheap (or cheaper) high-risk auto insurance.

Drivers With No Credit History or Bad Ratings

Lack of credit history is considered a risk factor by many high-risk auto insurance providers, as they see credit history as an indicator of a driver’s financial responsibility and stability. Moreover, drivers with poor credit scores are more likely to get involved in a car accident and file a claim. To add insult to injury, drivers with poor credit history may not be able to pay their insurance premium and loan at the same time. If the insurance companies discover this possibility during preliminary evaluation, they may even decline high-risk auto insurance.

Owners of Expired Coverage

Owning expired insurance coverage is a surefire way to get under the category of risky drives. Not only is driving without auto insurance illegal in the United States, but also it pictures you as an irresponsible and extremely risky driver. Likewise, giving up driving for months and years will likely make you a risky or at least riskier driver than you were when you were active. On the other hand, the absence of lawsuits, accidents, and late payments will reduce the cost of car insurance for high-risk drivers all the same.

Violators of Traffic Rules

According to data presented by Value Penguin, traffic violators see a significant increase in their auto insurance rates in 2023, with the average increase being 52%. The most common violations are speeding and driving through a traffic light, besides more severe violations. It goes without saying that the more violations, and the more severe they are, the higher the insurance premium and the harsher the condition of a policy. Also, an increase in the number of risk events within five years automatically leads to the transfer of the driver to the high-risk category and the need for bad driving car insurance.

Factors Contributing to a High-Risk Driver

When determining your risk level, insurance companies are guided by equally important driving and non-driving factors.

Careless driving

Reckless behavior on the road, such as driving through red lights and stop signs, speeding, etc., leaves with only one auto insurance option: insurance for bad drivers.

At fault in previous accidents

Being at fault for the previous accidents is the main reason for the transition to the group of high-risk drivers. High-risk liability insurance would be even more expensive if several such accidents happened in a year.

Driving while intoxicated 

Driving under the influence is another serious violation that automatically contributes to higher auto insurance rates and a high-risk driver status.

For for the non-driving factors, these are gaps in insurance coverage, driving experience, age, and credit history.

How Do Insurance Companies Calculate Risks?

Having decided to purchase high-risk auto insurance, it is worth checking whether you fall into the high-risk category. For this, you need to know how companies identify drivers who are more likely to make a claim. When assessing risks, auto insurers focus on several indicators and consider statistical data. Take, for example, credit history. People with bad credit scores are more likely to file insurance claims and thus risker for car insurers. On a similar note, elderly drivers can also contact providers more often because, at this age, changes in the body affect driving. Young people aged 16-17 are also in the high-risk group for similar reasons.

What Auto Insurance Provider Offer the Most Affordable High-Risk Auto Insurance?

In the USA, there are dozens of reliable and proven insurance companies that provide the best car insurance if you have had an accident. Each of them runs an individual insurance program with different rates. Here are a few well-known insurers that provide car insurance for high-risk drivers:

  • Infinity Insurance
  • GEICO
  • Gainsco
  • 21st Century
  • Progressive
  • National General Insurance
  • Safe Auto
  • The General Insurance

Likewise, the best high-risk auto insurance can be found at Bristol West, Dairyland, Kemper, and Direct Auto Insurance. Market_Watch_Ntl._Costs Source: Market Watch

How to Acquire High-Risk Auto Insurance After Being Rejected Coverage?

Insurance denials do happen. However, this is not a reason to give up on your second-chance insurance or wait for your insurer to change their mind. A wiser decision is to continue searching for the right provider. It’s worth remembering that high-risk car insurance isn’t designed for perfect drivers but, in fact, problematic ones (at least from the insurer’s perspective). You don’t have to be ideal behind the wheel but must find an insurance company that can offer the right high-risk plan.

The Best High-Risk Auto Insurance for Drivers

Numerous surveys have shown that most high-risk drivers choose high-risk car insurance from State Farm for their favorable conditions across the entire range of high-risk policies. That said, there may be exceptions depending on your driving history. For example, if you’ve had intermittent speeding issues, you may want to consider Geico as your best car insurance for bad driving records.

FAQ

What is the best high-risk auto insurance company?

The list of high-risk auto insurance companies includes Infinity Insurance, GEICO Gainsco, 21st Century, and Progressive. State Farm auto insurance can be a one-size-fits-all solution.

What is the cheapest high-risk auto insurance company?

Cheap high-risk auto insurance can be found at USAA.

How much is insurance for a high-risk driver?

The average monthly premium for high-risk auto insurance is around $275.

Who is considered a high-risk driver?

High-risk drivers are drivers who lack driving experience, have a bad driving record, a large history of claims, or anything else that makes them risky on the road and prone to filing insurance claims.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to CoverExplore. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At CoverExplore, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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