4 Auto Insurance High-Risk Factors that Make Rates Rise

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Things to Remember...
  • Auto accidents and speeding tickets can increase your insurance premiums
  • If labeled a high-risk driver, you might have a hard time finding affordable insurance
  • Driving an expensive car, a poor driving record, and being convicted of a crime can significantly increase your insurance rates

If you know someone who’s had few car accidents, or who’s received several speeding tickets, then you probably know that their insurance rates are taking a bite out of their bank account. If insurance providers have declared you high-risk, then there are several things you should watch out for to keep your rates manageable.

While no one wants to be declared a high-risk driver and pay higher car insurance rates as a result, thankfully, by addressing several factors, your premiums won’t get out of hand. Here are four things in particular, which could make your insurances rates

Here are four things in particular, which could make your insurances rates increase significantly: including driving an expensive car, a bad driving record, getting convicted of a crime and damaging your credit rating.

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High-Risk Insurance

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If an insurance company decides that a driver is likely to file several claims and cost them money, then they may classify that person as a high-risk driver. Typically, once someone has been labeled as such, they will have a tough time finding a company that will offer them standard rates for their car.

In other words, if you’ve caused an accident or two and have demonstrated you’re not a safe driver, then a company may classify you as a high-risk driver and not insure your car anymore.

In order to get their car insured, most high-risk drivers will have to purchase high-risk car insurance, or what’s often referred to in the industry as non-standard insurance.

Some major providers offer various tiers of car insurance, which can include preferred, standard, and non-standard. However, many insurance companies do not, and as a result, many companies specialize in offering high-risk car insurance.

Finding companies that offer non-standard insurance may also depend on the state in which you live. For example, in some states like Indiana, the government mandates that each provider insures a specific number of high-risk drivers.

In other states, the government oversees its own high-risk insurance program. The eligibility for these programs can vary.

For example, in Texas, two insurance companies must turn down a high-risk driver before they can apply for the Texas Automobile Insurance Plan Association.

Since it’s illegal to drive without car insurance in virtually every state, these government programs make sure every motorist is protected from what could be thousands of dollars in damages.

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Driving an Expensive Car

If you’re a high-risk driver and decide to drive an expensive car, then be prepared for your insurance rates to increase. The more valuable a car is, the more it will cost an insurance company to repair it.

Insurance providers already believe high-risk drivers are more likely to cause an accident, so they will charge you more to insure your pricey car as a way to offset any potential costs.

In addition, many expensive cars are extremely fast, and as a result, they’re far more likely to be driven at speeds that are unsafe.

Although some high-risk drivers may be doing their best to drive responsibly, having a high-performance sports car isn’t the best way to reassure a provider that you’re going to drive safe.

Criminals are also more interested in stealing luxurious cars or breaking into them to take their stereo and other valuables. As a result, you’re more likely to file a claim than if you drove something cheaper.

Since most high-risk drivers have already filed several insurance claims, the last thing your budget needs is to file several more.

It’s more practical to drive a cheap car. Not only do they cost less to repair, but also they’re not as much of a target for automobile thieves. In addition, if you have a cheaper car, you may not need to take out as much insurance.

For example, if the car is old, then you may not need collision coverage for it. Collision insurance pays for the damages to your car in an accident you cause.

If the car isn’t worth much, then you may also decide that you don’t need to buy comprehensive insurance for it either. Comprehensive insurance pays for damages that occur from acts of nature and non-motorists.

For example, if your car is damaged in a hailstorm, comprehensive insurance will pay for the repairs.

Bad Driving Record

Another high-risk factor that will cause your premiums to rise is if you add to a poor driving record. Most high-risk drivers pay higher insurance rates because they already have been involved in a few accidents or have received several traffic tickets.

This risky behavior shows an insurance provider that they could cost them a lot of money. If you cause yet another car accident or continue to rack up speeding tickets, it will only make you a less desirable customer and your rates will rise accordingly.

On the other hand, if you demonstrate over time that you are driving more safely, then a provider is more likely to drop your insurance rates.

Another way to show insurance companies that you’re working on your driving skills and improve your record is to take driving lessons. Even if you have in the past, some organizations offer driving lessons, which are tailored towards mature and senior drivers.

Having a Criminal Record

A surefire way to spike your car insurance rates or possibly lose your coverage altogether is to commit a serious driving offense when you’re already a high-risk driver. People who are convicted of driving under the influence or driving recklessly will likely see their premiums soar.

In many states, people are who are convicted of a driving-related crime are required to file an SR-22 form with local authorities.

An SR-22 is proof that a high-risk driver has the required amount of insurance for their vehicle. If you’re required to file an SR-22 and fail to keep it current, an insurance company will inform authorities that you have failed to do so and your license will be revoked.

You can find out more about how a criminal record may affect your car insurance, and whether you may require an SR-22 by contacting your state government. For example, in Indiana, the Bureau of Motor Vehicles provides information regarding proof of insurance.

Damaging Your Credit Rating

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High-risk drivers should also make sure that they pay their bills on time and avoid doing anything that could damage their credit rating.

If your credit rating takes a hit because you’re consistently late paying your car insurance premiums, then a provider will see you as an even greater risk to insure and will charge you more.

Compare Providers

At the end of the day, one of the best ways to keep the lid on your non-standard insurance rates is to shop around and compare providers.

Depending on where you live, there are likely plenty of options out there for your car, and by taking the time to find the cheapest rates; you could save some serious money.

One of the quickest and most convenient ways to do this is to use a website that specializes in comparing auto insurance rates.

Once you’ve answered a few general questions, the site will locate several great quotes for you to review. No commitment is required, and the quotes are free!

Find affordable car insurance now by entering your zip code into the FREE box found below!

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