Automobile Insurance Plans and High Risk Drivers
High-risk drivers may find it difficult to find a company willing to provide them with car insurance coverage. This is because auto insurance companies are allowed to refuse car insurance to drivers they feel are too risky to cover.
Fortunately for these high-risk drivers, most states have an automobile insurance plan or assigned-risk insurance plan that can help them get the car insurance coverage they need.
What Is an Automobile Insurance Plan?
Most states mandate a minimum amount of auto insurance; therefore, there needs to be an option for drivers to get car insurance coverage in the event that they are denied by providers in the standard market.
Automobile insurance plans were designed for this reason. Through this type of plan, the risk of covering a “high-risk driver" is shared amongst all participating car insurance companies.
States that have an automobile insurance plan typically require all auto insurance companies that do business in that state to participate in the plan.
What Is Assigned Risk?
Like automobile insurance plans, assigned risk plans are state-run plans meant to help high-risk drivers meet their state's car insurance requirements.
Typically, car insurance companies that do business in a state with an assigned risk plan must participate in the program.
Drivers who apply to the assigned risk plan will be assigned to one of the companies within the plan.
How to Apply?
Through an Agent
In most cases, you can apply to your state's automobile insurance plan or assigned risk plan through your auto insurance agent.
If you are considering applying for this type of plan, ask your agent to begin the application process for you.
Through Your State's Insurance Department
In some cases, you can apply to an automobile insurance plan or assigned risk plan by directly contacting your state's Department of Insurance.
Some states require that you apply to several car insurance companies before you apply for the state's car insurance plan. If each provider has denied you car insurance coverage, you'll be accepted into the plan. Typically, your signature on the application is enough to acknowledge that you have fulfilled this requirement.
Costs of an Automobile Insurance Plan
Car insurance rates are always difficult to predict, as many factors go into determining what you'll pay for your car insurance coverage.
However, because these programs are meant for high-risk drivers, the rates are likely to be much higher in comparison to standard car insurance premiums.
Because rates for car insurance through a state plan are considerably higher than standard rates, you should consider a state plan a last resort.
While one car insurance company may reject you, it does not mean that all car insurance companies will. Some companies even specialize in high-risk car insurance.
Get multiple car insurance quotes when shopping. This can be simple to do, as several companies offer free car insurance quotes online. If, after contacting several companies, you still can't find one willing to provide you car insurance coverage, you may need to apply to a state-offered plan.