Over the years, the auto insurance industry has found ways to absorb most high-risk drivers into its ranks through "nonstandard policies," where you pay a high premium but secure the liability insurance you must have by law to drive.

But there are drivers even the regular car insurance industry can't help. These are drivers who can't buy car insurance in the "voluntary market" because they are first-time drivers or their driving records are chock-full of motor vehicle violations. These are folks who are expected to make future car insurance claims.

If you're in that boat, you'll have to dive into your state's "assigned-risk pool," also known as the "residual" or "shared" market. This is where risky drivers can buy car insurance policies at a high price from insurers who must take them on. All auto insurance companies that operate in a state must take on a number of assigned-risk drivers in proportion to their share of business. Residual-market policies may be available for all types of vehicles, including commercial vehicles, motorcycles, motor homes, campers, all-terrain vehicles, snowmobiles and golf carts.

Nationwide, assigned-risk drivers make up about 1.22 percent of total private-passenger liability premiums, according to 2005 data from AIPSO, which provides services for insurers that operate in residual markets. Because auto insurers have been more aggressive in developing premiums for riskier drivers, the residual market has been on a steady decline since the 1990s, according to John Verruso, organization spokesperson for AIPSO. Back in 1991, by comparison, the residual market accounted for 5.31 percent of premiums.

Proportions of assigned-risk drivers vary greatly among states. North Carolina has by far the largest residual market in 2005 (the latest data available), topping 1.5 million cars, or over 23 percent of its insured cars, according to the Insurance Information Institute (III). New York, in second place, had about 213,000 private-passenger cars (about 2.3 percent) in its residual market, according to III. And some states have only a handful of cars in the pool: Colorado had five, Utah and Washington had three and South Carolina had two.

How an assigned-risk pool works

Each state has its own eligibility rules for its assigned-risk pool, but typically you must have been declined for a car insurance policy or offered a policy at a rate higher than the pool's premiums within the last 60 days. Some states may require that you've been turned down more than once. AIPSO has each state's manual online.

Your car insurance agent will help you get a policy from the residual market. You'll likely sign a declaration stating that you're eligible under your state's rules and your agent will tell you your rate and the insurance company to whom you're assigned. This rate is set by your state insurance department, so no matter which insurance company you get, your rate remains the same. However, your premium will still vary according to factors such as where you live, your age and your driving record.

Even in the residual market, you'll have some policy options. Of course you'll have to buy liability insurance for at least your state's minimum requirements, but you will likely have a range of liability-amount choices above that, plus the option to purchase collision and comprehensive coverage.

It's possible you can get out of the pool within a year or two. Your residual-market insurer may offer you a policy in the voluntary market. States often provide incentives to insurers for these "take outs," according to Verruso. Or, you may be able to find a voluntary-market car insurance policy yourself. There's no law against shopping around for car insurance!

The standard assigned-risk period is three years, according to Verruso. Then you'll be back in the voluntary market, and, one hopes, not returning to the pool.