Auto insurance companies categorize potential policyholders as either standard or high risk drivers, determined by information gathered during the underwriting process. High risk drivers will be required to obtain high risk auto insurance, which means higher-cost coverage. The reason high risk auto insurance costs more than standard insurance is because, from the insurance company’s perspective, the likelihood of having to pay claims on your policy is statistically higher. Higher premium costs are their attempt to help equalize this risk.
What Defines a High Risk Driver?
If you’ve been classified as a high risk driver, it can be the result of one or more factors, some over which you have no control. Age, for example, is not something you can do anything about – yet teen drivers are automatically considered higher risk drivers because so many teens are involved in accidents or are guilty of committing driving violations. Elderly drivers, aged 70+, are also considered higher risks for many insurance providers because, at that age, they frequently suffer from some loss of mobility, reduced vision acuity and decreased reflex time. Insurance companies also often penalize new drivers because their inexperience in driving usually means that they have a higher risk of being involved in a car crash.
Though not all insurance providers treat new and elderly drivers as high risk, most do. This is one reason why it’s important to shop around for the best insurance quotes and, if you’re classified as high risk as a new driver that you get new quotes after six months or a year of driving experience (with no infractions) is under your belt.
Minimizing Your Increased Rates
Insurance companies offer numerous discounts to qualifying drivers, and you should always look into these and compare what’s offered by various insurers. For teen drivers, the easiest way to save money on insurance may be to get added to your parents’ coverage if possible. You may also qualify for premium discounts for having a high GPA and for completing a driver’s Ed. or defensive driving course. Other discounts may be given for driving a vehicle with airbags or other safety equipment like ABS brakes.
Curb Your High Risk Insurance Rates
The most important factor affecting your auto insurance rates is your driving record. By not committing violations such as reckless driving, excessive speeding or being found responsible for causing accidents you’ll have the best opportunity to obtain the lowest insurance rates. The car you drive, however, can also push you into the high risk auto insurance classification. You might also be surprised to learn that home ownership, occupation and credit rating also play a part in how your risk level is classified by various insurers.
Every insurance company has their own way of determining how much to charge an individual for coverage. Your best strategy is to shop a wide number of companies, keep your driving record and credit rating unblemished and drive a vehicle that’s safe and gets good insurance company ratings.