High Risk Insurance Companies vs. Standard Companies - What is the Difference?

Published on Jan 10, 2014
High Risk Insurance Companies vs. Standard Companies - What is the Difference? Image

You may have heard of high-risk insurance companies, or perhaps you have been told you should talk to one about your coverage. If so, odds are that you have tickets or accidents on your record that mean you don't qualify for coverage from a standard insurance company. If you're wondering what the difference is and how to get the best rate even when you need high risk auto insurance, the answers are straightforward.

The Difference Between High Risk and Standard

What makes a high risk auto insurance policy necessary for any particular driver depends on the insurance company itself. Each company can decide for itself which drivers qualify for their standard policies and which do not. That means that while your current company may tell you that you can no longer be covered under their standard insurance plan, other companies may not see you the same way.

As a general rule, a high risk insurance policy is one designed for a driver who has multiple marks against their driving record in the form of tickets and accidents. In some cases there may be serious violations such as a DUI that makes a driver high risk. The distinction means that due to the tickets or accidents, the driver is seen as someone who is more likely to be involved in an accident and file a claim with the insurance company. Because they are viewed as being a higher risk to insure, the premiums for high risk drivers are often higher.

Standard and high risk are defined by each insurance company in turn, so there is no clear definition of either.

What is a High Risk Auto Insurance Company?

While some companies may offer a few policies in the high risk area, there are companies that specialize in them. High risk auto insurance companies have created policies that meet the needs of drivers who are trying to prove themselves and work off demerit points.

Because high risk insurance companies specialize in helping out drivers with problems on their record, they often have the best rates for those drivers. In some cases you can save money even if you qualify for a standard policy by going to a high risk insurer, simply because they rate for tickets and accidents differently. Basically, while you might get the highest rates from a standard insurance company, your record could land you some of the better rates at a high risk company.

Shopping for High Risk Auto Insurance

Shopping around for high risk insurance coverage is much the same as shopping for any coverage. The important thing to note is that you don't have to limit yourself to getting quotes from high risk insurers alone. The best way to ensure that you are getting the best coverage at the best rate is to request quotes from many different insurance companies, including high risk ones.

Remember that even if your current insurance company has told you that you are high risk and don't qualify for their standard policy, that might not be the case with every company. Don't count yourself out! Take the time to get some quotes from several other companies. Some may inform you that you don't qualify, but odds are some will be able to quote you.

It's important to be honest about your driving record when you are shopping for high risk coverage. Providing accurate information makes it possible for insurance companies to give you accurate quotes. Remember that if you accept a policy and then the company finds out there's more on your record, they'll increase your rate anyway. It's best to be honest and get the right quotes from the start.

Getting Back to Standard

Remember that you won't be a high risk driver forever. As tickets and accidents fall off your record, you can check back and get quotes to find out how your rates might drop as a result. While you won't necessarily get back to a standard policy right away, you could get lower rates every time you renew if your driving record is improving.

It doesn't take long to get online insurance quotes on icandrive.ca, so take a moment to compare premium options whenever you are up for renewal. It's up to you to stay on top of your insurance rates and find out when you might be able to see a reduction in what you are paying. It's a good rule of thumb to check several insurance companies every time you renew. Remember that although tickets and accidents may fall off your driving record the date you got them, for insurance companies the rate change happens on renewal. They start charging on renewal and will remove the charge on renewal as well. That means your policy renewal date is the best time to compare quotes.


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