What Is a High-Risk Driver?
Definition and Examples of High Risk Drivers
The term "high-risk driver" refers to someone who isn't eligible for insurance through a preferred carrier. It can refer to someone who has to have a special form completed and filed with the government in order to have car insurance at all, but this is usually reserved for those with high-level auto-related offenses that result in death or serious injury.
What Is a High-Risk Driver?
You can become a high-risk driver in three common ways. A DUI/DWI conviction always means higher insurance rates, and many drivers are surprised to see a cancellation notice from their insurance carrier soon after being charged with or convicted for one of these offenses.
Your policy will almost certainly be canceled at renewal when your carrier becomes aware of this type of major violation, even if it's not canceled immediately.
Having multiple traffic violations adding up to more than six points against your license typically means that you'll no longer qualify for a preferred insurance carrier. This might be the result of a mishmash of tickets and at-fault accidents that create seven points or more.
A single car accident with a claim paid out is always considered an at-fault accident regardless of the circumstances.
Driving without insurance is against the law in every state. Unfortunately, very few exceptions are made for drivers with no prior insurance. You can be considered a high-risk driver without proof of at least six months of continuous insurance, even if you haven't had insurance because you just got your license. New drivers without experience are considered to be high risk as well.
How Being High Risk Works
High-risk drivers don't get the best insurance rates. Sometimes it’s because they don’t know how to find insurance they can qualified for, and other times it’s because they’re legitimately an expensive risk for an insurer to take on. Insurers charge high-risk drivers with higher premiums because they consider the likelihood that they'll have to pay a claim is higher.
You might even be denied auto insurance coverage, depending on the severity of the circumstances that makes you high risk. But some insurance companies specialize in covering in high-risk drivers, so you would most likely still have some options. You'll just pay more for them.
Types of High-Risk Drivers
Four types of drivers can find themselves falling into the high-risk category.
- Insurance companies associate a poor credit score with the probability that an individual will make a claim. Drivers with poor scores are considered to be a higher risk than those with good or even average scores.
- Having an insurance claim filed against you is a surefire way to become high risk. Even not-at-fault claims can sometimes increase your rate.
Some insurance carriers have come up with a way for you to avoid claim-related increases by purchasing "accident forgiveness," an option that you'd pay extra for in lieu of a surcharge after an accident.
- Young drivers don't have to do anything wrong to be considered a higher risk than a seasoned driver. Their age alone puts them in a high-risk insurance price range. So many young drivers are in accidents and have traffic violations that can increase the severity of already high-cost insurance premium. All drivers go through this period of high risk as they gain driving experience.
Increased age can also result in being tagged high risk. This can be the case for elderly drivers who are older than age 65 or 70.
- Some insurance carriers view drivers who don't own homes as being higher risk than homeowners. Insurance companies prefer stability, and owning a home is a large contributing factor. Several online insurance companies don't rate based upon home ownership, however.
How to Become a Better Risk
Every driver presents some level of risk for an insurance company, and not many qualify for the very best rates. And even high-risk drivers have room for improvement. Identifying why you're considered to be high risk is the first step in improving your record.
- Consider taking a defensive driving course if your high-risk status relates to accidents or traffic violations.
- Take steps to increase your credit score. Make at least minimum payments monthly on credit accounts rather than no payments at all if finances are tight. Pay down your credit card balances if your financial situation permits it.
- Time is usually on your side. The longer you drive without another DUI or other major violation, the less high risk you'll be. And even a 25-year old driver gets better rates than a 17-year-old.
- Your choice of a vehicle can matter, too. Consider trading yours in for one with additional safety features.
What Rate Will I Pay?
The unfortunate reality is that high-risk drivers will probably pay about 25% more in premiums for their auto insurance policies. Shop and compare quotes, starting with preferred carriers, but don't overlook other carriers that are more willing to insure high-risk drivers and those that specialize in these types of policies.
- The term “high risk” defines drivers, but it also refers to insurance carriers’ policies regarding such drivers and the associated premiums.
- Auto insurance premiums for high-risk drivers can be as much as 25% more.
- Multiple and serious moving violations are the most common reasons a driver can be tagged as high risk.
- A driver’s age can also contribute. The elderly and new drivers under age 21 are commonly considered to be a higher risk to insure.
Insurance Information Institute. "What If I Can't Find Auto Coverage?" Accessed Sept. 28, 2020.
Insurance Information Institute. "Credit and Insurance Scores." Accessed Sept. 28, 2020.
AutoInsurance.org. "Cheap High Risk Auto Insurance Rates (Tips to Save)." Accessed Sept. 28, 2020.
State Farm. "What is High Risk Auto Insurance?" Accessed Sept. 28, 2020.