High Risk Auto Insurance – A Basic Understanding

Owning a vehicle is very expensive. One of the most costly expenses that comes along with owning a vehicle in most states is the auto insurance premiums. According to the Insurance Information Institute, from 1999 to 2008, Americans have spent an average of $779.30 per year on auto insurance premiums.

Understand that this is the average, and if you are a high risk driver, you can expect to pay double even triple that amount. The insurance companies use a very complex set of factors to determine how high risk a driver is, which directly affects the driver’s premiums. The unfortunate part about this, is the fact that there is not a lot one can do to lower their risk. Often times the criteria is something simple like age or gender, which you can do nothing about. If you happen to fall into the category of being a high risk driver, you may be looking at very high insurance premiums. Fortunately, there are some things you can do to lower your High Risk Auto Insurance costs.

What It Is

In the simplest terms, a high risk auto insurance driver is a person who exhibits the potential to cost the insurance company a lot of money. This usually includes young drivers, drivers with bad driving records, and drivers of expensive vehicles. Basically, when you get into an accident, you cost the insurance company a lot of money in damage and possible medical bills. High risk drivers will need to pay more in premiums, in order to offset the financial risk they pose.

Examples Of High Risk Drivers

Let’s take young drivers for example. I think most of us can understand that a teenage driver who has just got their license is a high risk driver. Due to their inexperience on the road, they have a higher probability of getting involved in an accident than the average driver. Let’s take a look at some statistics from rmiia.org.

A 16 year old driver is three times more likely to die in a car accident than all other drivers.
Drivers between the age of 15-20 were responsible, or involved in 12% of all fatal accidents in 2008 and 14% of all drivers involved in police-reported crashes.
In 2006 (latest data available) crashes involving 15- to 17-year-olds cost more than $34 billion nationwide in medical treatment, property damage and other costs, according to AAA.

Because of statistics like these, young drivers are most commonly associated with high risk car insurance. Now imagine if that same young driver was driving a $50,000 two door sports car, and had 2 tickets within their first few months on the road. This is basically what the insurance companies do; they add up all the risk factors, and determine a payment amount.

Saving Money On Insurance

Like we stated previously, some of the factors that the insurance companies use to determine risk, are not possible to do anything about. Fortunately, there are some steps individuals can take to same some money on their high risk car insurance premiums.

A Safe Car

Insurance companies like to see a car with a lot of safety features designed to protect the driver in the event of an accident. These are simple things like anti-lock brakes, airbags, automatic seat belts and more. One should look for these options in the vehicles they purchase in order to save money on auto insurance.

An Affordable Car

Although the $60,000 luxury sedan looks enticing, if you are looking to save money on your high risk auto insurance, you really don’t want to go down that route. The more expensive a car is, the more expensive the parts and labor are to fix that car. This means more money the insurance company has to spend if you have an accident, so having an economical vehicle that is reasonable to repair, will save you hundreds on your premiums.

Safe Driving Course

This option has become more popular as of late, but isn’t necessarily available in all areas. Some insurance companies will offer discounts to young or high risk drivers, if they complete a safe driving course. Many insurance companies also offer discounts if the driver documents their driving habits, provided the driver drives less than the average person.

You may even be able to take a safe driving course at your local state motor vehicle department. According to DMV.org, nearly every state offers some form of defensive driving course. Once completed, you can then show this in good faith to the insurance company, and possibly save even more money on your high risk car insurance.

When You Apply

When you finally decide to search for the best rate on your high risk car insurance plan, you will want to make sure you get as many quotes as possible. Doing the entire process online allows you to do this much easier, and you can compare multiple rates from different lenders in minutes. If you keep the above in mind, finding an affordable high risk auto insurance plan should be an simple and easy process.

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