The Best Insurance for High Risk Auto Insurance

Fran
Dani Milton
May 6, 2019

No one's driving record is perfect. Anyone who has driven enough miles has gotten into a car wreck, received a speeding ticket or given a parking citation, regardless of how careful they are on the road. 

There are a few drivers with more serious infractions. They race on the road against other motorists in traffic. Others drive while under the influence (DUI) of alcohol, instead of hailing an Uber or Lyft driver. Some have multiple traffic violations. They may need high risk auto insurance because they are high risk of filing a claim.

Usually, an agent or carrier may recommend that a driver get a high risk car insurance policy. But what is a high risk auto insurance policy, and why is high risk auto insurance even necessary? In this article, you'll learn about high risk auto policies and why you may need one. 

What Is High Risk Auto Insurance?

High risk auto insurance is a policy that insurers use for motorists they believe have an increased likelihood of filing claims. This coverage also addresses higher-risk situations where settlement amounts may exceed the price of a normal one.

Auto insurance companies use underwriting to determine whether a driver needs high-risk auto insurance. During this process, the insurer evaluates the applicant's vehicle, driving record and other factors to determine if they are eligible for coverage.

 Once completed, they assess how great of a financial risk each driver poses to them. They use this process to determine the premium for their customers.

Has a carrier recently denied your coverage? SmartFinancial can help.

What Is a High-Risk Driver?

The industry doesn't have a single definition for a high-risk driver and each carrier will profile you differently. Insurers charge high-risk drivers more money because they are more likely to file claims than other policyholders. High risk car insurance costs more for this reason.

There are several circumstances when an insurer may believe a driver needs high risk auto insurance. For instance, a person could have a greater number of traffic citations, driving under the influence convictions or multiple accidents.

A car insurance company may determine that a driver needs high-risk car insurance for other reasons. For example, a person may be considered a high-risk driver because of their poor credit score, inconsistent payment history, age, or their vehicle's features and price. Others may pay  higher premiums if they own a rare sports vehicle with parts that are expensive to replace.

Who is considered a high-risk driver? These motorists may fall into the following categories:

  • Young and inexperienced motorists (20 years or younger)
  • Elderly drivers (70 years or older)
  • Individuals with a poor credit history
  • An uninsured motorist  with lapsed  coverage or no prior automobile insurance
  • People who own modified or high-value vehicles
  • Persons involved in multiple car accidents
  • Individuals that live in high-risk areas
  • Drivers with high-level offenses on their records that involve injury or death
  • Persons with DUI-convictions
  • A person required to file an SR-22 with the state

Your recent record is the most critical factor that determines your rates. If you have an accident in the last 12 months, it will count more toward your rates than a five-year-old incident.

Do I Need an SR 22 or FR 22 with High Risk Auto Insurance?

If an auto insurance company has identified you as high-risk, they may require you to get SR-22 or FR-22 certification. These filings show you have enough insurance or financial responsibility following an at-fault wreck. The insurance company will file a form with your state's Department of Motor Vehicles if you need this documentation.

Find Affordable Car Insurance

How Can I Find Cheap High Risk Insurance?

A rate for a policy with one insurance company will differ from another, so it pays to shop around. Using an online tool like SmartFinancial can help you get the best rates and coverage for your budget. Just enter your zip code and we'll help you find affordable car insurance for high risk motorists.

What are SR-22 and FR-44 Certifications?

An SR-22 is a certification form that most states require high-risk motorists to file. Your insurance carrier submits it to your local government to prove you've complied with your area's minimum auto insurance requirements. It is a document that shows you have the minimum liability insurance required by your zip code. Most states and carriers call this a certificate of financial responsibility.

When submitting documentation and buy a policy, the SR-22 insurance companies tell you will maintain coverage for the specified time. If you don't meet the requirements, the insurer will contact your state government. If this happens, the state can revoke your license or suspend it.

FR-44 certification serves the same purpose as SR-22 certification, except the liability requirements are higher than an SR-22. This certification proves that a high-risk driver carries coverage that exceeds their state's minimum liability insurance coverage requirements. Only two states require this documentation: Virginia and Florida.

Who Needs an SR-22 of FR-44 Certificate?

Not everyone will need to file an SR-22 or FR-44 certificate. Only motorists that had their licenses suspended must file these documents. These individuals must ask their carrier to submit this documentation.

You may have to file this certification if you have:

  • Convictions for driving while intoxicated or driving the influence of drugs or alcohol
  • Repeat traffic violations
  • Violations resulting in serious injuries or death
  • Causing a wreck with no coverage
  • Revocation or suspension of your license

When the state requires SR-22 certification, the high-risk auto insurance will result in an additional charge.

How Long Do High-Risk Drivers Need SR-22 or FR-44 Certification?

You will typically need to keep SR-22 on file for a minimum of three years. A high-risk driver can suffer several penalties when he or she doesn't have liability insurance or the proper certification.

The person can pay fines. Additionally, the state could suspend or revoke the driver's license. 

To restart coverage, individuals will have to pay additional fees and repurchase SR-22 or FR-44 certifications.

How Much Does High-Risk Insurance Cost?

The price of high-risk insurance is $570 more for a minimum liability coverage policy. This coverage must meet the state requirements. A full-coverage high-risk auto insurance policy has a rate hike that's nearly double that of a minimum policy. 

To find the best coverage that's right for you, it pays to comparison shop. SmartFinancial has tools that can provide you with rates from multiple car insurance companies within your area. It's free and easy. Just enter your zip code on this page to get started.

Although SmartFinancial cannot predict the exact price of your car insurance, we can show you different estimates based on your high-risk profiles. It includes individuals with an at-fault wreck, DUIs on their record, and individuals with bad credit. In upcoming sections, we will review the following auto insurance costs for high-risk motorists.

Rates for High-Risk Drivers After At-Fault Car Accidents

Auto insurance companies consider accidents as a red flag that a person may be a high-risk driver. When a risky driver has a wreck, the insurer must pay the damages outlined in the policy.

Additionally, the insurer may have additional costs if the individual has a future wreck. Your rates will go up three years following an at-fault accident.

One car accident can increase someone's premiums 41 percent and almost $667 per year.

Months Following an At-Fault WreckAverage Rate Increase
Sixth Month Increase$336
Twelve-Month Increase$667
Three-Year Increase$1,980

State Farm and USAA provide the most affordable rates for people following a wreck.

High Risk Car Insurance Costs for Drivers Who Receive a Speeding Ticket

Insurers check your driving record before they calculate your premium rates. They check for items like speeding tickets on your record.

A speeding ticket can raise your insurance rates by almost 25 percent. If you receive tickets, you will see rates increase depending on the circumstances surrounding their violation. Insurers will consider the following factors:

  • Your previous driving record
  • Whether your ticket was a first-time offense
  • Length of time since your last violation
  • How many miles you were over the speed limit
  • The location where the violation occurred

Most speeders can expect to see an almost $352 annual increase in their insurance premiums.

Speeding tickets are the least serious traffic violations; however, some insurers see them as precursors of more serious incidents. They believe that speeding can elevate your chance of having an accident.

Months After Violation Average Rate Increase
Six-Month Increase$182
Twelve-Month Increase $355
Three-Month Increase$1,050

USAA and State Farm provide the best high risk options and cheapest rates for motorists that have speeding tickets on their records.

Price of Car Insurance for Drivers with Bad Credit

Carriers use a credit-based score to separate consumers into a pool based on risk. According to the Fair Isaac Corporation (FICO), 95 percent of auto insurers use a credit-based insurance score to set car insurance rates.

These scores use some elements of a driver's credit history to predict how likely they are to file a car insurance claim. According to the National Association of Insurance Commissioners, insurers consider factors such as your payment history, outstanding debt, credit history length, credit mix and pursuit of new lines of credit.

Many states prohibit  insurers from using credit as the sole factor to determine rates. They must include additional factors like your driving history, age and vehicle type. Some areas also prohibit using someone's credit score to calculate their insurance rates. These include:

Three carriers provide the lowest average rates for people with poor credit scores: Nationwide, USAA and Farmers.

FICO Credit Tier Average Six-Month Premium
Very Poor (300-579)$1,433
Fair (580-669)$1,135
Good (670-739)$937
Very Good (740-799)$787
Exceptional (800-850)$650

Average Rate Increases for Driving Under the Influence (DUI)

Driving under the influence (DUI) is a traffic offense that results in the highest property damage, bodily injuries and deaths. In this situation, a person operates a vehicle with a blood alcohol content that exceeds the legal limit. The person can also drive while impaired by illegal or prescription drugs.

According to the National Highway Traffic Safety Administration, 28 people in the U.S. die in drunk driving crashes every day. In 2019, NHTSA reported that 10,142 people died in drunk-driving-related crashes.

A person that receives a DUI or DWI conviction may see their premiums rise almost 71 percent if you're charged with a DUI or DWI.

Your premium will increase by $485 for a six-month policy when you receive a DUI charge. These result in higher bodily injuries, property damages and death benefits than any other auto accidents. It comes out to $80.83 each month on your premium.

Time After a DUI Conviction Average Increase
Six Months $485
Twelve Months$961
Three Years$2,867

American Family and State Farm provide the cheapest rates for individuals with a DUI conviction.

Cost of a Reckless Driving Conviction

Reckless driving is a traffic violation that is the top five most expensive for carriers. It involves motorists who operate a vehicle while willfully disregarding another person's safety or property. It can cause severe injuries and vehicle damages.

When law enforcement convicts a person of reckless driving, their rates can soar over 67 percent on average. Some people will pay $450 more during their six-month policy period and $900 annually. Additionally, they will lose their good driver discounts.

A reckless driving conviction affects a driver's record for three to six years on average.

Months After Reckless Driving ConvictionAverage Increase
Six Months$450
Twelve Months$900
Three Years$2,700

Cost of High Risk Drivers Based on Age 

Another high-risk factor that carriers pay attention to is age, charging higher premiums to younger motorists. Insurers view inexperienced and teenagers as higher risk because they don't have enough experience on the road. They believe it can increase their chances of having an accident.

Two of the cheapest companies for car insurance rates are Nationwide and USAA. 

Auto Insurance CompaniesDrivers in their 20sDrivers in their 40s
American Family$839$630
Farmers$960$751
Nationwide$739$505
State Farm$858$628
Travelers$805$609
USAA$780$560

Cost of Car Insurance for an Uninsured Motorist with Coverage Lapses 

Auto insurance companies also place motorists into the high-risk category if they have lapses in auto insurance coverage. They see individuals who continue to pay their car insurance (with no interruptions) as financially responsible. Insurers charge individuals with coverage lapses with higher rates.

Insurance HistorySix-Month Premium
None$826
Six Months$886
One Year$771
Three Years$755
Five Years$742

Find Affordable Car Insurance

What are the Best High Risk Insurance Companies for Drivers?

High-risk insurance can be expensive. It's best to shop around and compare prices to lower your car insurance cost. You can use online insurance technology like SmartFinancial to get a free online auto insurance quote from several carriers. These can help you determine how your driving record affects the cost of your car insurance.

1. State Farm

Category: Best for DUIs and Reckless Drivers

America's largest insurance company is a more affordable car insurance option for high-risk drivers. State Farm provides high-risk drivers with lower premium increases after an accident compared to other major carriers. It also has cheaper quotes for individuals with multiple infractions or DUIs.

The insurer also provides discounts that may offset the cost of any rate increases. It can save high-risk drivers up to 30 percent on their bill. Their insurance savings include:

  • Vehicle safety equipment discounts
  • Bundling multiple policies
  • Driver training discounts
  • Defensive driving discounts
  • Member of State Farm's Drive Safe & Save and Steer Clear programs

2. Allstate

Category: Best for Accident Forgiveness

This company has an accident forgiveness program that is more generous. Individuals can collect rewards like an Allstate Safe Driving Bonus after being accident-free after being a member for six months. Drivers can also increase their savings by enrolling in Allstate's Drivewise program, which tracks safe driving behavior using an app.

3. USAA

Category: Best for Military Families

This insurance company only offers products and services to veterans, service members and their families; however, USAA offers the most affordable rates for high-risk drivers in the nation. Their payments don't increase as much as some other insurance companies. Here are a few of the discounts they offer:

  • Accident Forgiveness
  • Good Student Discount
  • Defensive Driving Discount with an approved course

4. The General

Category: Best for Basic Coverage

Although The General doesn't have as many discounts as its competitors, it is still one of the best options for high-risk drivers, such as those with DUIs. They also file SR-22 forms, which some states require after a person received a serious traffic citation.

The company provides customers with convenient payment options and lower down payments. The General also specializes in providing auto insurance to the following motorists:

  • Individuals who have never had coverage
  • Drivers with a lapse in their prior coverage
  • Individuals with accidents or violations in the past
  • Drivers considered as high-risk

5. Erie Insurance

Category: Best for Young and Inexperienced Drivers

If you're a young or inexperienced driver, you may have to pay higher auto insurance rates than others. Erie is only available in 11 states; however, it has great car insurance for high risk drivers. It offers discounted rates to high-risk and inexperienced drivers. This insurer also offers discounts that may appeal to younger drivers. Here are some discounts they offer:

  • Rate-lock to prevent rates from increasing even after a claim
  • First accident forgiveness
  • Youthful Driver Discount
  • College Credit

6. American Family Insurance

Category: Great for Drivers with One At-Fault Accident

American Family Insurance is not available in every state.  This company only serves 19 regions; however, high-risk drivers should consider this option when searching for cheaper rates. When a driver has a traffic violation, their premiums only rise a small amount. The insurer also has an excellent accident-forgiveness program that helps prevent large rate hikes when a driver has their first at-fault accident. You can purchase this coverage for an additional fee when you buy your policy. To qualify for coverage, you must meet the following requirements:

  • No at-fault accidents or driving violations in the last 12 months
  • No more than one at-fault accident in the past three years

Tips to Find a Good High-Risk Auto Insurance Company

Before you sign up with a high-risk auto insurance company, research them thoroughly. It will help you select a trustworthy insurer that will provide you with real coverage when you need it.

First, note the insurance company's number of complaints on the National Association of Insurance Commissioners website. The national median is 1.0, and companies with poor ratings score above 1.7. Additionally, research the financial strength of each company by looking at their grades from different assessment companies.

How To Lower Your High-Risk Insurance Rate

High-risk insurance can be expensive. It's best to shop around and compare prices to lower your car payments. You can use online insurance technology like SmartFinancial to get free online auto insurance quotes. These can help you determine how your driving record affects the cost of your car insurance.

Although SmartFinancial cannot predict the exact price of your car insurance, we can show you different estimates based on your high-risk profiles. It includes individuals with an at-fault wreck, DUIs on their record, and individuals with bad credit. In upcoming sections, we will review the following auto insurance costs for high-risk drivers.

  • Take a defensive driving course in your area.
  • Select a car with an excellent safety record
  • Get a vehicle with great safety features (such as airbags, automatic seat belts, anti-theft alarms)
  • Follow all traffic and parking laws within your area
  • Avoid getting a ticket for three years (or more)
  • Drive defensively to avoid an accident
  • Seek discounts with your insurance company
  • Take steps to improve your credit score and history

Which Insurance? High Risk Drivers Want to Know What's Cheapest!

When looking for cheaper insurance, you can save money by comparing coverages from different companies. An online insurance search engine, like SmartFinancial, can help you find the most affordable policy based on your profile. We provide you with free insurance quotes from multiple carriers in your local area within minutes. Just enter your zip code below to get started.

Get a Free Auto Insurance Quote Online Now.

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