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High-risk car insurance: How to shop for it

You may think you're pretty good behind the wheel. But if you rack up enough accidents, speeding tickets or even one serious infraction -- such as driving under the influence of alcohol or drugs -- you may find yourself classified as a "high-risk driver."

As a high-risk driver, you may be able to buy a standard policy at a higher rate from a traditional insurance company, or  you may buy what's known as a nonstandard policy, where there are restrictions on, say, who can drive the car or how much coverage you can buy.

The nonstandard market includes both small, niche companies, and some major carriers, like Geico and Nationwide, which have divisions selling non-standard coverage.

How much more is high-risk auto insurance?

You'll definitely pay more for coverage as a high-risk driver. For instance, an Insure.com rate analysis found that, on average, drivers will pay 76 percent more after a drunken driving conviction, 66 percent more if they have poor credit, 36 percent more for two speeding tickets and 29 percent more after an accident that injures another motorist.  

But, that doesn't mean you can't still save money. The good news is that you'll probably save more money by comparing car insurance rates than a standard or preferred driver would, because you're starting from a much higher rate to begin with.

Not all insurers treat high-risk drivers the same way. Some companies will assess much harsher rate penalties than others on high-risk customers, which means it's always wise to compare car insurance quotes before buying a high-risk policy. Finding the most forgiving carrier can ease the painfully high rates that typically come with being a high-risk driver.

List of high-risk auto insurance companies

Companies that cater to high-risk drivers include:

  • The General, a subsidiary of American Family Insurance
  • Direct Auto and Life Insurance
  • Titan Insurance, a subsidiary of Nationwide Insurance
  • Dairyland Insurance, a subsidiary of Sentry Insurance
  • Geico Casualty, the high-risk branch Geico
  • Infinity Insurance
  • Safe Auto Insurance
  • Gainsco Insurance
  • Victoria Insurance
  • Bristol West Insurance
  • Affirmative Insurance
  • Alliance United Insurance
  • United Automobile Insurance
  • Access Auto Insurance

In addition to comparing car insurance rates, here are five key things to note about buying a high-risk auto insurance policy:

There may be limints on who else can drive your car: Some companies that sell nonstandard auto insurance will cover only specific drivers who are named in the policy.

Your driving record may be reviewed more often: Insurance companies may not always look at the driving record of safe drivers every year. However, an insurer may check the record of a high-risk driver upon policy renewal time, and hike rates if there are any moving violations.

You may not be insured for punitive damages. A nonstandard policy also may not cover you if you're in a wreck and you're sued for punitive damages and lose.

Here are some other things you should know about how insurers handle high-risk drivers.

Am I a high-risk driver?

Before selling you car insurance, insurers will check a number of things -- including your driving record and claims and credit history.

According to the Insurance Information Institute (III), drivers fall into one of the following categories:

  • Preferred: Drivers with outstanding driving records, excellent credit and buy higher limits. This group gets the lowest car insurance rates.
  • Standard: Average drivers with good driving records and average credit. This group get decent rates.
  • Nonstandard: Young, inexperienced drivers and drivers with many tickets and accidents or a reckless driving or DUI history (also known as high-risk drivers). This group poses a lot of risk to insurers so pay more than the other groups for their car insurance premiums.

And then there is a fourth category: Drivers who can't convince any insurance company to sell them a policy.

This type of driver can still buy insurance through their state’s "assigned risk" pool but they'll typically have to prove they've been repeatedly rejected by car insurance companies, and their premiums will be two to three times higher than the national average.

In addition to having multiple accidents, speeding tickets or a DUI, there are other factors that can push you into the high-risk category. The following items will not necessarily dump you in the “assigned risk pool,” but the are factors that can increase your car insurance rates.

  • Bad credit score. Although you can't be denied insurance altogether for a lousy credit score, it can be a factor in what an insurance company will charge you in most states.
  • A lapsed insurance policy. If you failed to pay your car insurance premium and had your policy cancelled by another insurance company, other car insurance companies will likely find out and factor that into your premium. You'll also pay higher rates if you drove without insurance for a period of time -- in some states it has to be at least 30 days -- in the previous 12 months.
  • A young driver with no record. Inexperienced drivers are among the riskiest around. It's important to establish and maintain a good driving record if you want inexpensive insurance.
  • Your profession: People who drive great distances for their job -- delivery drivers for example -- are considered high-risk drivers by many car insurance companies. If you drive for work and not just to work, you probably need a business auto policy, not a regular personal lines policy.
  • Your car: Certain types of high-powered cars, including some sports cars, can fuel higher auto insurance rates. These cars are expensive to repair and their drivers tend to make more claims. Check out Insure.com's list of the most and least expensive cars to insure to see how vehicle choice can impact your rates.

What to do if you can't get car insurance

If one company turns you down for auto insurance, keep shopping with the best auto insurers to compare quotes. Another may be willing to sell you a policy, and you want to stay out of the assigned-risk pool. Being classified as a "high-risk driver" doesn't necessarily force you to buy from your state’s assigned-risk pool.

How long are you considered a high-risk driver?

Most car insurance companies will forget about your accidents and poor driving record if you maintain a clean driving record for at least three years. But this varies by insurer. Some will look back as far as five years when assessing how risky a driver you are. If the offense has fallen off your driving record, your insurer should no longer be able to use it to increase your rates.

Many states use a point system that assigns a score according to the severity of an incident. Insurers use a different system of "insurance points" that they associate with various traffic violations, accidents and claims. Just as with state points, the more severe the offense, the more points you're assigned.

You can ask your insurer how long it will take for your insurance points and related surcharge (increase in rates) to fall off so your rates can improve. In the meantime, driving carefully, avoiding accidents and paying your insurance bill on time should be your goals.

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