Many drivers find themselves lumped into a category called high risk, often through no fault of their own. They typically have to pay higher rates for car insurance, and their choice may be limited to companies that specialize in high risk policies.
The most common reason for being placed in a high risk category is that you are under 21. Regulations vary from state to state, but in most places insurance companies charge higher rates for younger drivers. The justification for this policy is that younger drivers are more likely to be involved in accidents.
The good news is that younger drivers can often reduce their rates by taking accredited driver training courses. Some companies also give students discounts for maintaining good grades. And you probably will not have to go to a company that specializes in high-risk drivers just because you are under 21.
Some high-risk insurers say that they charge no more for younger drivers, but this statement may not be meaningful because they charge more for all of their policies than other insurance companies.
Some things that insurance companies consider risk factors might surprise you. For example, many insurance companies charge more for drivers who have poor credit ratings. Drivers with poor credit ratings may have more accidents. Many companies also typically charge higher rates for first time drivers, no matter what their age. Again, new drivers may be more likely to have accidents.
Some types of high risk drivers face very serious problems. Your insurance carrier may raise your rates drastically or cancel your policy altogether if you have a large number of traffic tickets or accidents. If you maintain a clean driving record for a number of years, your insurer may "forgive" some of your accidents and violations and reduce your rates. But be warned: insurance companies are particularly quick to cancel your policy if you are convicted of DUI or DWI.
In some cases, a high-risk driver may be required to file an SR-22 form with the state department of motor vehicles in order to keep his license. This typically happens when a driver without insurance has been involved in an accident, or if an accident was caused by a driver's serious violation of the law.
An SR-22 is an official certification by an insurance company that you have at least the minimum coverage required by law. Regulations vary from state to state, but in most places your insurance company must file SR-22 certification for a period of three years after an accident. Some companies specialize in this service. They allow you to request SR-22 certification online, and they file your SR-22 with the state department of motor vehicles almost immediately.
In the past, high-risk insurance policies were offered by only a few companies, and they charged very high rates for coverage. As more insurers have gotten into the business, rates have become more competitive. Still, if you want to keep your rates down, the best advice is to work hard to keep your driving record clean.
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