How do I get car insurance with a high risk record?
Auto insurance companies determine the cost of policies by assessing risk. People are considered to be high-risk drivers if they have been involved in multiple accidents in the past or have a history of traffic violations or DUI convictions. Additionally, some people may simply just belong to a high-risk demographic, such as young drivers. In any case, high-risk drivers pay more for auto insurance than other people and may have a difficult time purchasing a car insurance policy from a standard carrier.
How do car insurance companies calculate risk?
Car insurance companies keep track of multiple types of information about a driver in order to predict his likelihood of being involved in a collision. In addition to his driving history, a driver’s age, credit score and marital status all affect the cost of his insurance. The type of car a person drives and where he lives will also play a role in determining the insurance premiums. All of a driver’s information is input into a computer, which analyzes the risk through a complex algorithm; this means that an insurance agent may not know exactly what effect any particular event will have on a policy until the policy renews.
Statistical information plays an important role in determining how much a policy will cost. For example, men pay more for car insurance than women do because men are statistically involved in more accidents. Nevertheless, statistics will never play a greater role than a driver’s actual history. A person with multiple accidents will always pay more for car insurance than someone who has never been in an accident, regardless of the other factors involved.
Most car insurance companies utilize a points system to track accidents, traffic violations and other driving infractions. Each incident translates into a point against a driver’s record. After a certain number of points, the premiums are increased. A substantial number of points would lead to the policy being canceled entirely. In most cases, it can take up to seven years for a point to drop off of a license, meaning that it can take quite awhile for a driver to repair his driving record.
How do I buy car insurance after my company drops me?
Car insurance companies may cancel a policy if the driver is found to be too high of a risk to insure, or if the driver has caused the company to lose a substantial amount of money in claims. For example, multiple small claims may lead to a cancellation faster than a single large loss as the small claims will cost the company a substantial amount in staffing and manpower.
Once a policy has been cancelled, it’s the insured’s responsibility to find a new insurance company. Failure to obtain insurance could lead to a person’s driver’s license being suspended. He could also be fined for driving without insurance, and he would be personally responsible for paying any auto accident he may cause while uninsured.
In most cases, a driver will be able to find an insurance company that will cover him even if his last company denied him coverage. The premiums may not be as affordable as his old policy at first, but after several years of safe driving with the new company the customer should see his premiums begin to go down.
If a person cannot get coverage with a regular insurance company, he can obtain a policy through a high-risk company. High-risk insurance is usually somewhat more expensive than regular auto insurance, but these companies often rely on direct sales and other low-cost operating methods in order to cut costs and keep premiums reasonable.
Drivers with extremely bad driving records can also obtain an assigned risk policy. This is a special type of insurance that’s underwritten by pooled funds. This spreads the risk out across several insurance companies. One company may handle the claims service, but the settlement is actually funded from another company or several companies. Most assigned risk policies are only for liability insurance, but it is possible to get full coverage auto insurance if you have a lien on your vehicle that requires full coverage.
Purchasing auto insurance as a high-risk driver is somewhat difficult, but it’s certainly not impossible. The Internet makes it much easier to locate a company that can provide the coverage that you need. When searching for a policy online, bear in mind that the quote you initially receive may not be entirely accurate due to your driving record not being known.
Once you contact a company for a more detailed quote, the representative will look into your driving history and produce a personalized estimate for your specific policy and driving history. This way you will know exactly what you will pay and can decide on the best policy for your budget.