How Do Non-Standard Insurance Companies Work?
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Non-standard insurance policies provide auto coverage for high-risk drivers. These policies function much like a standard or preferred policy, except they cost more to offset the potential risk to the provider. You can potentially move to a standard policy or preferred policy if you gain more experience on the road, maintain a clean driving record or raise your credit score.
If you’re a high-risk driver and need insurance, keep reading to find out how non-standard policies work and where you can get the coverage you need at the lowest price.
What Is Non-Standard Auto Insurance?
Non-standard auto insurance refers to coverage that is meant for high-risk drivers, specifically those who have less-than-stellar driving records, have poor credit scores or are new drivers. Being high-risk means a driver is more likely to file a claim against their policy or miss payments. Higher risk drivers may be required to complete an SR-22. This form is filed on the insured’s behalf by their provider and lets the government know if they’re insured.
How Do Insurance Companies Calculate Risk?
One of the most important factors insurance companies use when calculating your risk is your driving record. Drivers who have DUIs, at-fault accidents and driving infractions are considered to be a higher risk because a poor driving history means there is a higher potential for there to be risky behavior in the future and consequently a higher cost to the company.
Drivers with clean driving records are more likely to be a lower cost to the company and therefore qualify for the lower premiums of a standard insurance policy or preferred insurance policy.
The distance you drive will also be factored into whether or not you’ll need non-standard insurance. Long, one-way commutes are seen as being potential risks for car accidents as you will be on the road for an extended period of time. The more time you spend on the road, the higher the likelihood you’ll be in a car accident.
Your vehicle's make and model will also factor into how high your risk is because those with sports cars are seen as being more likely to take chances on the open road. Age and marital status also play a role in calculating a driver’s risk. Younger people are more likely to take more chances and they have less driving experience. And those who are married are generally seen as being more responsible behind the wheel than those who don’t have families.
How Does Non-Standard Insurance Work?
The process of purchasing non-standard insurance works much the same way as buying standard auto coverage, although there may be additional requirements imposed depending on your record. In some instances you may be required to complete an SR-22, letting the DMV know whether or not you're insured. You will also likely have a higher deductible.
Non-standard auto insurance is the most expensive tier of coverage that is meant for high-risk drivers. If you fall into this category, you are seen as a higher risk to cover for an insurance company which makes your premium higher to help cover the potential losses an insurance company may incur by allowing you a policy. Insurance companies will usually follow a three-tier breakdown for coverage: preferred, standard and non-standard. Preferred customers will likely have:
- A clean driving record
- At least six months of prior insurance
- No lapse in their auto coverage
- A very good credit score
- Few or no claims filed
Standard drivers will likely have:
- An average credit score
- Prior insurance coverage
- Few minor traffic violations
- One at-fault accident
Non-Standard drivers will usually have:
- Several accidents
- Filed multiple claims
- No prior insurance
- A poor credit score
By utilizing these three categories, insurance carriers can calculate what their risk is when insuring customers. For instance, if you have multiple infractions or have been convicted of a DUI in recent years, you will be considered a higher risk to the insurance company. This means you will be put under the non-standard tier of insurance, which will have higher rates than the other two tiers. If your current provider finds you to be too high of a risk, you will likely be dropped. You would then need to seek coverage from an auto insurance provider that specializes in non-standard auto policies.
Who Is Non-Standard Auto Insurance Required For?
There are several red flags that may trigger the requirement for a non-standard auto policy, including:
- At-fault accidents - At-fault accidents will make you a higher risk to your provider because it is they who must foot the bill for any damages you may have caused to another person and/or their property.
- Bad credit history - Bad credit means you are a higher risk to insurance carriers. Most providers will look at your credit and your credit history when calculating your risk because there is a statistically higher chance of filing a claim or not making payments.
- Driving with a suspended license - Driving with a suspended license is illegal and will result in you most likely needing to get non-standard auto insurance if you intend to drive in the future.
- DUI conviction - Major violations such as being convicted of a DUI will most likely require you to get a non-standard insurance policy.
- Hit-and-run conviction - Being convicted of a hit-and-run will require that you buy a non-standard auto policy should you intend to drive in the future.
- Insurance coverage history - Going without auto insurance can cause a lapse in coverage, making insurance companies see you as a higher risk, which could mean you fall into the non-standard tier for coverage.
- Multiple speeding tickets - A speeding ticket causes points to be added to your driving record. The more points you have, the higher the risk you will be considered by insurance companies. However, depending on where you live, you may have the option to do a defensive driving course which could remove the points from your record.
How Does a Deductible for Non-Standard Auto Insurance Work?
A deductible is a set amount of money you are required to pay before your insurance kicks in. The higher the deductible, the lower your premium will be. Non-standard deductibles are usually higher than a standard or preferred tier deductible. Your premium will also be higher than a standard or preferred premium.
Can Insurers With a Non-Standard Policy Still Get Discounts?
You can still qualify for certain discounts if you have a non-standard policy. This is especially important due to how much more expensive non-standard insurance is. Discounts may include:
- Anti-theft discount
- Automatic payment discount
- Bundling insurance discount
- Defensive driving discount
- Distant student discount
- Good student discount
- Low-mileage discount
- Loyalty discount
- Military/Veteran discount
- New vehicle discount
- Organizational discount
- Paperless discount
- Pay-in-full discount
- Profession-based discount
- Telematics discount
Best Non-Standard Insurance Companies
The price you’ll pay for a non-standard insurance policy will differ from one insurance carrier to another. Below are a number of providers offering non-standard policies so even those with a bad driving history, poor credit score and/or not enough experience behind the wheel can obtain the coverage they need:
- Bristol West
- Direct Auto Insurance
- Founders Insurance
- The General
- Kemper Auto Insurance
- National General
- Safe Auto
Can You Move From Non-Standard to Standard Auto Insurance?
You can move from a non-standard auto policy to a standard auto policy. The primary things that factor into your rating tier for auto insurance are things like your driving record, your credit score and credit history, your age and your marital status. All of these can change over time.
Take precautions when behind the wheel. Don’t take chances and don’t break the law. This will help you maintain a clean driving record by not getting additional tickets or points added to your license while your past infractions start to fall off your record. There are also some insurance companies that will reward drivers for going to traffic safety or defensive driving classes.
Make sure you pay down any debt you have and pay your bills on time, which will raise your credit score. Statistically, people with low credit scores tend to file more claims and miss payments. If you raise your score, you will be seen as less of a risk to your insurance provider.
You will also gain more experience and knowledge behind the wheel as time goes on, making you less of a risk to your insurance company. You will then qualify to move to a standard tier or possibly a preferred tier.
High-risk drivers need insurance at a lower cost. Enter your zip code below or call 855.214.2291 to compare multiple companies and receive free auto insurance quotes in minutes.