What Is High Risk Auto Insurance and How Do You End Up There?

All states require drivers to be able to show proof of financial responsibility. Most states simplify the procedure by requiring auto insurance. Non-standard drivers may have trouble fulfilling this requirement and need high risk auto insurance.

There is no neat legal description of a non-standard driver, and states may have different requirements. However, there are a few common conditions that can land a driver in the high risk category.

Driving Under the Influence: A DUI is the shortest path into the high risk insurance category. Even New Hampshire, a state with liberal insurance standards, will require insurance with an SR-22 form for at least three years.

SR-22 Insurance: “SR-22” refers to the form designation for a statement of financial responsibility and has become slang for high risk insurance.  SR22 insurance is most common for drivers after a DUI. However, depending on local laws, drivers can land in the SR-22 category for infractions including:

• Driving without proper insurance and/or registration,
• Being found at fault in a car accident,
• Consistent failure to pay traffic tickets,
• Racking up enough traffic infractions to be labeled a habitual violator.

Most states require a high risk driver to carry an SR-22 form with their insurance for a minimum of three years. If the driver can keep his record clean, he can usually drop to less restrictive and, consequently, less expensive auto insurance at the end of this time.

Assigned-Risk Pool: Most drivers buy their policies on the voluntary market. Both the insurer and the insured are free to accept or deny coverage. However, many non-standard and high risk drivers find the voluntary market closed to them and their only option is the assigned-risk pool. By law, insurance companies are required to accept a number of customers from this residual market. The number is based on their share of the state’s insurance revenues.

Assigned-risk insurance is expensive. Insurers may be required to issue the policies, but they are allowed to charge top dollar for it. Forty-two states administer their assigned-risk pool through a government office.

Like SR-22 insurance, most drivers can get back to the regular insurance market in three years if they clean up their record and don’t get any new violations.

High risk insurance is tricky, but it doesn’t have to last forever. An experienced insurance agent is the best resource to find the best coverage if your record isn’t perfect. Call Cloverleaf Insurance at 800-530-5822 to review your coverage and discuss your high risk options.