All About Assigned Risk Insurance

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All About Assigned Risk Insurance

If you live in the United States, you are required to obtain auto insurance before you are able to drive a vehicle. However, you may experience difficulty locating an insurance company that is willing to provide you with insurance if you are one of the many drivers assigned to the high-risk category.
Contrary to popular belief, most individuals who are in the assigned risk category actually possess a clean driving record. They may be assigned as high risk because they live in an area where a very high number of insurance claims have been submitted or because they fall into a high-risk group. Others may be categorized as high risk because of their age; drivers younger than 25 years old are statistically involved in more motor vehicle accidents. Another reason a person may fall into the high-risk category is the type of vehicle they are driving; certain makes and models have a greater chance of being damaged or stolen.
What is Assigned Risk Insurance?
Anyone who has a poor driving record will most likely encounter problems finding an insurance company willing to provide auto insurance. However, the majority of states help these individuals to obtain insurance coverage, thanks to what is called an assigned risk auto insurance plan. Assigned risk auto insurance companies sell auto insurance to individuals who have been turned down by other insurance providers.

Obtaining Assigned Risk Coverage

If you require assigned risk auto insurance, the first step is to approach an insurance agent and submit an application. If your application for coverage is denied by three insurance companies, the insurance agent will complete a form which is then sent to the state. The form indicates that you have been categorized as high risk and will require assigned risk car insurance.

You should contact your state insurance department and see if they provide any assistance with the insurance provider if you have been placed in the high-risk category. Another option is to visit a different insurance company and attempt to obtain auto insurance coverage. Never assume that just because one insurance provider has denied you coverage that you are forced to obtain coverage from a high-risk auto insurance company.

The rules and rates for new insurance policy holders vary from state to state and are constantly being revised. Therefore, if you have been denied by one insurance company, look for an insurance provider that specialized in providing coverage to high-risk drivers. If these methods are unsuccessful, you can obtain auto insurance coverage through the assigned risk auto insurance plan provided by the state.

What You Can Expect

If you have been placed under the assigned risk category, you have no choice but to purchase the minimum amount of insurance coverage that is required by law in your particular state. You won’t be eligible to apply for additional coverage. Although the cost of such insurance is normally higher than for policy holders who are not high risk, the assigned risk plan must accept your application for insurance coverage. This will provide you with the opportunity to drive legally and take additional steps to have yourself removed from the assigned risk category as soon as possible.

While you are in the assigned risk category, continue to conduct research so you can obtain a less expensive and more comprehensive insurance policy once your driving record improves. The good news is that drivers who submit their premium payments on time and maintain a clean driving record for three years can normally obtain a better deal and be removed from the category of assigned risk auto insurance.

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