Thursday, March 31, 2011

High Risk Insurance? Read here!

Nothing makes a person cringe more than the idea of having to purchase a high risk car insurance policy. One of the things that people find difficult about this is that "high risk" is such a subjective opinion, and means different things to different people. Let's take a look at high risk auto insurance, and put things into perspective.

Although car insurance is currently regulated at the state level in the United States, most states allow insurance carriers some flexibility in the actual plan coverage form, and have a wide latitude when it comes to choosing which customers to insure. They also have some latitude as to how they apply the state approved premiums to each potential insured. This is particularly important when considering the high risk consumer, because it means that not all car insurance carriers are going to judge the same consumer as "high risk".

There are certain factors that most auto insurance companies will automatically label as high risk in a client. These include more than two at-fault accidents within three years, multiple (more than three) not at-fault accidents within two years, insuring a very expensive automobile a low credit score (under 525), a major driving violation (Vehicular Homicide, Driving on Suspended License), no prior insurance coverage (or gap in coverage more than 30 days) or a SR-22 Filing Requirement.

Some of these factors can be corrected by the customer, in a year or less. This means they can then be moved to a "standard" insurance company and pay less premium. These would include improving their credit and simply staying insured for a longer period of time Other issues can be managed through proper insurance company selection. Some insurers, for example, will not raise rates dramatically, for the first DUI offense, if there are no other violations and the customer has a good credit score. Other insurers have a very minimal fee for an SR-22 filing, and one or two will specialize in writing those high value vehicles.

Shopping for more competitive auto insurance premiums is going to be more challenging for a high risk customer, but it very well could be worth a few hours of effort. Sometimes an existing insurance agent, if used, will automatically refer a consumer to the state assigned risk, reinsurance, or facility auto pool - which is probably going to be the most expensive option. Checking rates online or with a few other local agents, could end up saving a considerable amount, over the state "last resort" automobile insurer.

Using a local broker, or calling the prospective insurance company directly, could also result in getting additional credits applied to the account, to lower the premiums. Some of the lesser known credits, can include aftermarket anti theft discounts; home ownership discounts; various driving school discounts (they aren't just for teens, in some states!), and the "package credit" for having homeowners or renters insurance with the same company.  Of course, some of insurance carriers that write this type of automobile plan, don't write dwelling insurance. This may mean you need to look at other insurers.

When a consumer is facing the prospect of a high risk car insurance plan, it literally pays to look beyond the label, do some homework and some legwork, and take these few simple steps to get the auto insurance plan rates back under control. If a broker can't or won't sit down and help you understand your policy choices, and devise a plan to eventually move out of the high risk marketplace, it's time to find a new agent.

1 comment:

  1. Yes insurance policy for high risk drivers is so difficult to find. Most of the insurance providers simply say no to such people who are rated as high risk drivers. I personally have tried to obtain a policy and contacted most of the local agents in my area but failed to get one. Thanks for advising the way to search for this policy online.
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