What You Should Know About High-Risk Auto Insurance

Not every driver has a perfect driving record. If you've had a few tickets or got involved in a couple of at-fault accidents, then there's a good chance your auto insurance provider may consider you a high-risk driver and require you to purchase the appropriate insurance coverage. The following goes in-depth about what constitutes being a high-risk driver, what this means for your auto insurance premiums and how you can lower your risk profile.

When Are You Considered a "High-Risk" Driver?

As far as the auto insurance companies are concerned, a high-risk driver is someone who proves to be statistically more likely to get into an accident than comparatively low-risk drivers. For instance, being deemed at-fault for 2 or more accidents within the previous decade can create cause for alarm for insurance providers.

If you racked up 2 or more tickets for speeding or other common moving violations, your insurance provider may deem you a high-risk driver and take certain steps to protect themselves and other customers. Other factors, such as an aggressive driving style, ownership of certain high-performance vehicles and personal information such as your age, gender and even overnight parking zip code, could also influence whether you end up in the high-risk pile.

Dealing with High-Risk Insurance

Once you're deemed a "high-risk" driver, your auto insurance provider may set about dealing with it in a variety of ways:

  • Your insurance provider may already have a high-risk pool set up to cater to those with already bad credit and/or driving record. In many cases, your insurer may opt to switch your existing policy to a high-risk policy on your behalf. These policies are usually more expensive than ordinary insurance.
  • Your insurance provider may choose to drop you from their coverage. At this point, you'll likely have to purchase auto insurance from an agency offering "second chance" auto insurance coverage. Again, you may have to pay more than you'd expect and carry higher liability limits as a condition of the insurance.

How to Lower Your Risk Profile and Save Money

Just because you're deemed a high-risk driver doesn't mean you have to deal with high-risk insurance for the foreseeable future. Unfortunately, lowering your risk profile in the eyes of the insurance company is a waiting game – it can take 2 years for demerit points to disappear from your driving record. Traffic tickets, on the other hand, remain a permanent fixture on your driving record. However, auto insurers can only look at the past 3 years of your driving record. In essence, that gives you 3 years to keep your nose and your driving record clean.

In the meantime, there are other things you can do to lower your risk profile and save money:

  • Don't hesitate to shop around – Even if you're a high-risk driver, it still makes sense to comparison shop for the most reasonably priced policies available.  
  • Consider taking defensive driving courses – You may be able to get back in your insurer's good graces by demonstrating both knowledge and practice of safe driving skills. Taking a driver safety class or a defensive driving course could not only reduce your risk, but you may also qualify for related discounts.
  • Switch to usage-based insurance (UBI) – Currently undergoing trials in Ontario, UBI relies on GPS technology to accurately record and track driver habits, including speed, braking and acceleration. The technology promises to cut insurance costs by 12 cents. Adopting better driving habits while driving shorter distances could be the key to lower risks and insurance premiums.

Until you're able to once again enjoy the benefits of having ordinary auto insurance coverage, you can make the most of your time as a high-risk driver by following the above tips.