Many factors can make insurance companies consider you high-risk, even with a spotless road record
Drivers should consider their potential status as high-risk motorists. The common knee-jerk reaction is to dismiss the notion so long as there are no citations for driving under the influence, speeding, or texting while on the road.
Those are undoubtedly high-risk behaviors, but it doesn’t take obvious mistakes to put someone in the high-risk category. Other details about yourself can cause insurers to view you as a more significant risk, and knowing this information could cause them to adjust your rates.
Yes, those rates may go up if you communicate some of the factors that aren’t obvious. But it’s likely worth it should an accident occur. Insurers who find out key details too late may decide not to pay out at all.
This guide defines some groups in the high-risk category and how they can approach auto coverage transparently and responsibly.
The age factors
Two individuals, one very young and one very old, have good driving records; the former because they’ve got a shorter history, and the latter because they have many years of responsible motoring. But neither of them is in a great insurance position rate-wise. Youth equals high-risk to insurers, meaning that anyone from 16 to 25 years old will likely be paying higher average premiums.
Similarly, age and experience do not equal insurer confidence: drivers 65 and older are more prone to road accidents as decreased reflexes and diminished perception take their toll. Paying more purely for age can seem unfair to responsible drivers at both ends of the spectrum—but there are ways to mitigate the expense by shopping around.
How can drivers tackle the age factor? Here is a detailed list of insurers that younger drivers may want to consider for more agreeable rates. And a similar list is aimed at providing older drivers with more information on auto insurance providers that may deliver better deals.
Medical conditions
Many well-managed medical conditions may not seem like problems to the drivers, but a few can be a must-know detail for insurers. Conditions like heart issues, epilepsy, diabetes, arthritis, and vision impairment can jeopardize road safety. In the worst cases, a physician can decide that the individual isn’t fit to drive. In other situations, drivers may need to convince insurers that a condition won’t interfere with their on-road performance, or they’ll be covered at higher premiums.
There’s no dedicated auto insurance based on a particular illness, so setting rates depends on having a doctor verify that the individual is fit to drive or has gone a sufficient length of time without a medical incident.
A poor driving history and its insurance solutions
Age and medical matters are one side of the high-risk coin. A young or older person may be more likely to have an accident on average yet never be in one, and a medical condition may never cause issues on the road. But a documented history of bad driving is the other side of the high-risk coin. And it’s a much heavier label that can last for years or even permanently.
Too many points on your record through multiple accidents, repeated infractions, or DUI convictions will land you in the high-risk category, as will driving without insurance for any period. These black marks may cause insurers to drop drivers and force them to find another—likely, far more expensive—provider.
Drivers with points on their license can look into coverage through an assigned risk plan, which is also a possible option for drivers with no history at all. These state-operated policies ensure that even the riskiest drivers still have minimum insurance because it’s required by law. However, this insurance is rarely as comprehensive as traditional policies, and the nature of the coverage varies from state to state. For example, an assigned risk plan may cover you for property damage but not injury liability and medical payments, etc.
Assigned risk plans are available through normal insurance channels at a significantly higher price. Therefore, drivers should consider them only after thoroughly checking all other options through standard channels. The Automobile Insurance Plan Service Office (AIPSO) provides a quick way to check for state-specific plans.
Credit history and risk ratings
A low credit score (or even an average one) could result in a high-risk rating in today’s auto insurance market. Depending on how bad your credit is, you may even need an assigned risk plan. Using credit to calculate auto premiums is an unpopular but increasingly common practice that could affect 38% of the population. So, knowing where to turn for coverage if you fall into this category is essential.
A deep dive by NerdWallet listed Geico and Hastings Mutual as two good providers for drivers with bad credit, with State Farm and Progressive also making respectable appearances among the larger insurers. While it’s good that plenty of providers are willing to accept drivers with bad credit, it can be challenging to shop around alone. An insurance professional can help you lock down the most affordable plan.
Get ahead of risk before accidents happen
There is a way to buy yourself some leniency if you’re taking out new auto insurance and your driving record is good (which is a common requirement). You may be able to sign with an insurer offering accident forgiveness policies that don’t hold the first at-fault accident against the customer. Accident forgiveness also resets every few years to allow drivers one accident within an allotted period.
Being labeled high-risk isn’t the end of the road for auto insurance, and an experienced guide can help find you the right plan. If you’d like some advice, the NICRIS Insurance team can provide a free, personalized review. You can also contact us with any specific questions or concerns.