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A Quick Guide to High-risk Auto Insurance

As you have seen these for so many other topics, we wanted to create a simple guide for our customers on the topic of high-risk insurance in Sun Prairie, WI and surrounding areas. Fact is, auto insurance companies measure risk in many different ways, and this directly affects how much you pay for car insurance. If you have too many accidents or major driving offences on your driving record, you can fall into the high-risk driver category. If you get a DUI, you will definitely require an SR-22 and a high-risk insurance policy.

You may be asking, what is the best auto insurance company if I am a high-risk driver? That is where Action Insurance Agency comes in. Accidents, tickets and DUIs make you risky. So does bad credit or a lapse in your insurance coverage. Your risk determines which companies are willing to insure you. No two have the same guidelines or will charge you the same price, though. Compare auto insurance quotes so you know you’re getting the best rate.

Let’s get started by explaining what you can expect with this type of insurance coverage. Our goal here is to educate you so that you are in a position to make sure you are properly covered while saving the most money.

First, are you a high-risk driver in Sun Prairie, WI?

It all depends on how you fall into the following criteria in your specific situation.

Do you have driving experience?

If you’ve been driving for less than eight to 10 years, then you are considered an inexperienced driver. Most insurance companies levy an inexperience surcharge that’s greatest for those who are newly licensed. This surcharge gradually shrinks with each passing year.

How does your age affect car insurance rates?

Car insurance for teens is the highest when compared with all other drivers because data shows that this age group has the most accidents by far. Inexperience is only part of also being young. Every insurance company separates age groups differently, but if you’re under the age of 25 you can expect to be included in the group that pays the most for their insurance.

Do you have a clean driving record?

A single ticket or minor fender bender might not put you in the high-risk category. But if you have a driving track record that includes multiple tickets or a serious infraction – reckless driving or a DUI – you will fall into this category. If you have multiple at-fault insurance claims you will also be considered high-risk.

Do you currently have insurance?

If you have a license but no auto insurance, insurance companies assume you’ve been driving without insurance and are therefore a higher risk. For this reason, keeping coverage when you are a licensed driver is very important.

Does my credit score affect my insurance rates?

Drivers with poor credit-based insurance scores tend to file more frequent claims. Some insurance companies will look at credit scores as a factor that represents your overall responsibility level.

How do you choose a high-risk insurance company?

If you are a high-risk driver, this means you will be unable to purchase the same policies at the same rates as drivers who fall into the standard and preferred categories. Those drivers, who have no or few violations, minimal claims, good credit and a continuous insurance history, get better rates because they pose less risk. If you keep a clean driving record going forward, before you know it you will fall back in to the standard and preferred categories and your rates will go back down. Until then, Action Insurance Agency exists to ensure we get you the lowest rates when you need it the most.

As a high-risk driver, you may be able to buy a standard policy at a higher rate from a traditional insurance company. Another option is what’s known as a nonstandard policy, where there are restrictions on who can drive the car or how much coverage you can buy. The nonstandard market represents about one-fifth of all private auto insurance sold and draws both small, niche companies, and divisions of the large insurance companies such as Progressive.

With all of these options it can be mind-boggling to figure out what the best option is for you in this situation. We can solve that for you at Action Insurance Agency. High-risk insurance coverage is all we do.

How much does high-risk auto insurance cost?

At this point it’s no secret to you that you will be paying more for coverage as a high-risk driver. Data shows that drivers can pay as much as a 76 percent increase in premiums after a drunken driving conviction, 66 percent more if they have poor credit, 36 percent more for than one speeding violation, and 29 percent more after an accident that includes an injured motorist.

The good news is that you’ll probably save more money by comparing car insurance rates than a standard or preferred driver would, because you’re starting from a much higher rate to begin with. The great news is that when you work Action Insurance Agency, we do everything we can to minimize any increases in rates by doing all of the comparisons for you.

Every company calculates rates differently. We can show you side-by-side quotes, so you get the most affordable solution in this situation. The difference in pricing can be hundreds, and sometimes even thousands of dollars. Let us help you save the most money on high-risk car insurance.

6 things you can expect from a non-standard policy

Although we may not recommend a non-standard policy in your specific situation, we wanted to provide this information for those that this is the best fit for. To find out what is the best type of policy for you in this situation, don’t hesitate to contact our agents serving Sun Prairie, WI and the surrounding area.

There may be limits on who can drive your vehicle.

With a standard policy, you should list anyone on your policy who lives in your household or who drives your vehicle regularly as drivers. If you have out-of-town visitors staying with you for a week or two, they are allowed to drive your car without having to be added to your policy.

It is important to note that some companies who offer nonstandard auto insurance will only cover specific drivers who are named in the policy. If someone who isn’t listed, like your mother-in-law, gets in the driver’s seat and gets in a wreck, your insurance company may not honor your claim. We will help you navigate this when setting up your high-risk policy. Some insurance companies might require you to exclude certain household members such as those under the age of 25.

Your coverage may be reduced in some areas.

You may face what are known as step-down provisions that reduce the amount of liability coverage if someone who isn’t named on your policy is at the wheel. That means if your cousin comes for a visit and borrows your car, the liability coverage will be lower than if you were driving. In many cases, a state’s minimum requirements fall short of what you would need to pay for injuries or property damage to someone else’s vehicle.

Your coverage may be less if you have an accident.

If you purchase comprehensive and collision coverage with a nonstandard policy, you also could see a difference at the auto repair shop if you’re involved in an accident.

A standard policy will generally cover the full cost of repairs, unless your auto insurer decides your car is a total loss. If your car is totaled, you’ll receive the depreciated value of the car, which is its market value just before the wreck.

Unlike a standard policy, your nonstandard policy may depreciate your repairs. So rather than covering the full cost of repairing the damage if you’re in a fender-bender, the policy would pay only a portion of the cost, which is determined by the depreciation of the vehicle.

Your driving record may have a closer eye on it.

Insurers may not check a low-risk driver’s motor vehicle record (MVR) every renewal period. It may go even a year or two between checks, experts say, allowing some infractions to escape notice until then. The worse your record, the more likely that your MVR will be pulled every renewal period and your rates adjusted.

Some of the little extras might not be included.

Even if you’re a safe driver, benefits such as having a vanishing deductible or accident forgiveness are no longer an option if you opt for a nonstandard policy.

You may not be insured for punitive damages.

A nonstandard policy also may not cover you if you’re in a wreck and you’re sued for punitive damages and lose. It is important to be a careful driver if you choose a nonstandard policy.

How do I get back on track and reduce my rates?

Time and a clean driving record will improve your chances of getting standard coverage and bring your insurance premiums back to much more attractive rates.

If you are no longer considered previously uninsured.

If you were considered previously uninsured before, a single term of coverage will erase your previously uninsured status. We can help you shop for car insurance again as your renewal date nears if this applies to you.

Keep your credit record strong.

You can ask for an insurer to recalculate your rates at the next renewal if you think your credit has improved. Consider comparing quotes again if this applies to your situation. Your newly improved credit increases your chances of saving money. Some carriers will treat you more favorably than others when you have achieved this status. We can help you find the best fit.

Keep your driving record clean.

Most insurance companies usually look back three years, and some look as far as five, for infractions. The newer the infraction, the more heavily it’s weighed. A defensive driving class might help in some situations. Ask us for advice on how to keep your record in great shape for insurance purposes.

Action Insurance Agency Guides

If this guide didn’t answer all of your questions about high-risk auto insurance, we stand ready to answer all of your questions. We go to work every day to set you up with the best companies, policies and coverages that save you the most money. Contact us today and we’ll serve as your guide!