5 Keys for Comparing High Risk Auto Insurance Companies

Sometimes, it is hard to find an auto insurance company that will cover you. If you have had a DUI or had an insurance company cancel your policy, you know the ordeal you went through to get coverage. That is where high-risk auto insurance companies come in.

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Even with high-risk insurance companies, you still need to compare the policies and quotes they offer you. Here are five guidelines for comparing high-risk auto insurance companies.

Know How Much Insurance You’re Getting

It is important that you understand exactly how much insurance you are getting with a high-risk policy, no matter whom you are buying it from. Many high-risk insurance policies only offer the minimum required by the state.

How much coverage you need varies by state. While all states require liability, which pays for the other driver’s damage if you cause an accident, other states require more. Many require you to have uninsured motorist coverage or medical coverage.

Uninsured motorist coverage will pay the repair bill on your car if the other driver causes the accident but does not have insurance. Even though he is legally required to pay for the damage, it can take a long time to get the money from someone who does not have insurance, as it often takes a court appearance. This allows you to get your repairs completed much more quickly.

It will also cover any costs above what the other driver’s insurance pays.

If the at-fault driver’s insurance will only cover $5,000 in damage, but your repair bill is $7,000, your uninsured motorist coverage will pay for that gap.

Because liability may not be enough coverage, many states require their drivers to pay for a medical policy on their car insurance. There are two different kinds: personal injury protection or medical payments. Both will pay for the hospital and doctor bills after an accident for anyone in your car, regardless of who is at fault. Personal injury protection is more inclusive, as it will also cover things like lost wages and even funeral costs.

Check with your state department of motor vehicles or department of insurance to learn about the requirements in your state.

Comprehensive and collision is usually not available through high-risk insurance policies. Neither are higher limits on your liability policy.

However, when you are comparing the high-risk companies and the quotes they give you, be sure to ask about exactly what is included in their quote so that you can make a fair comparison.

Compare Their Complaint Ratio

Even though you are a high-risk customer, which means it is harder for you to find car insurance, you still want to make sure you are going to be treated fairly by the company. You will be paying a lot more – perhaps two or three times as much – as the typical car insurance customer, and you can still be treated in a professional manner.

One way to see if you will get a fair deal from the high-risk insurance company is to check their ratings online. You can go to the department of insurance for your state and find out a lot of information about the company.

For example, if you live in Texas, the Texas Department of Insurance’s website provides a list of the number of complaints filed against every carrier licensed in that state. It also gives the ratio of complaints to the number of policies issued.

This can give you an idea of how difficult a company is to work with, as most complaints relate to claims. You can also check with J.D. Power & Associates to see customer satisfaction ratings.

Compare Their Financial Strength

Some traditional auto insurance companies have a division that handles high-risk customers and policies. Therefore, it is possible to get high-risk policies from this type of company.

Sometimes, these companies will not cover you, so you will need to look at companies that only deal with high-risk drivers.

If you are dealing with a small high-risk auto insurance company that you have never heard of before, take the time to check out their financial standing.

You can do this on the state insurance websites, or you can check with an independent source. A.M. Best has a lot of useful information on car insurance requirements in your state as well as a way to check the rating of a company you are looking at. Just enter the company’s name in the box at the top of its page.

Examine Other Factors besides Price

In addition to the lowest price, you should look for other things when you are comparing high-risk auto insurers. If you are required to file an SR-22, a vehicle liability insurance document, with the state, make sure that the company you are looking at will do so for you.

If you are able to get a high-risk policy with a traditional auto insurance company, ask if you could still qualify for a multi-car or multi-policy discount.

This way, it might be possible for you to receive a discount, if not on the high-risk policy, at least on the others. If you have your home or other family car insurance with the same company, you might be able to get a bit of a discount.

Also, ask about certain conveniences, especially regarding payment. If you prefer to pay your bills online or have the company set up an automatic withdrawal each month, make sure the high-risk company accepts such things.

You Might Have More Exclusions

Remember that you will probably have more exclusions than you would on most standard auto insurance policies. These will vary by company, so do your homework and research the policy’s features, as it is vital that you know what they are ahead of time.

For example, you might not be covered if you drive someone else’s car or lend yours out to someone. Some policies will only cover you for the car on your policy.

You also might have more restrictions on the activities under which you can be covered.

Reasons You May Be Considered High Risk

There are many reasons drivers can find themselves categorized as a high-risk driver. Sometimes, they do not even have anything to do with how well you drive.

Understandably, drivers who have had DUIs usually receive high-risk rates, and often have to have an SR-22 on file for three to five years after the offense. The same could be true for anyone convicted of a car-related crime.

Sometimes, people receive a high-risk label because they have had a high number of at-fault auto accidents. If you have a pattern of costing carriers a lot of money, they will charge you a higher premium.

Even having too many tickets can bump you up into a high-risk category. Since this is evidence of repeated risky behavior, the insurance companies will put you into this category, as they believe that a high incidence of accidents is very likely.

If you have been late too many times paying your bill, or fail to pay your insurance premiums at all, you have probably had your car insurance policy canceled by the company. Once you have a cancelation on your policy, this is a red flag to any other company that looks at you. Even if you have a clean driving record, this sort of financial risk will put you in a high-risk category.

In addition, young adults or teens getting insurance receive high-risk classification just because of their age and inexperience. They can usually be added to their parents’ policies to avoid the high-risk policy. A teen driver’s premium is still extremely high, though not as high as it would be if the driver had a policy of his or her own.

Drivers who have been without insurance for any period are usually considered high risk, even if there was no cancelation involved.

In addition, drivers with extremely low credit scores or a recent bankruptcy might find themselves in a high-risk category. Insurance companies use credit history to help determine premiums. Thus, a financial catastrophe can even affect your insurance.

If you are having a hard time finding an insurance company to cover you because you are considered high risk for any reason, you can usually look to your state to help out.

Most states have a special program set up to help drivers with this predicament.

They have agreements with certain high-risk companies in their states to cover high-risk drivers who meet certain criteria, like being turned down by other companies. For example, the high-risk driver in Texas can look to TAIPA for assistance. To find a similar program in your state, look on the department of insurance website.

Regardless of your reason for needing high-risk auto insurance, there are companies that will cover you. It will be expensive, but with a few years of safe driving, you can usually buy standard insurance.

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