Insurance for High-Risk Drivers: Who Needs it and Why is it Important?

Insurance rates differ for every driver. Before you can buy a new policy, insurers assess you in terms of risk. The greater the chance you will put in a claim, the higher your premium rates will be.

While this assessment is something all drivers go through, it is particularly important if you are considered a “high-risk driver.” In that case, not every insurance company will cover you. Your existing insurer may choose not to renew your current policy.

Fortunately, some companies specialize in auto insurance for high-risk drivers. They offer coverage when others might not — good news for people who need insurance to stay on the road.

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Who is considered a high-risk driver?

Several factors can make a driver “high-risk,” including what happens on and off the road.

A history of at-fault accidents, traffic tickets, and claims on previous insurance policies would classify a driver as high-risk. Age and inexperience may also contribute to the high-risk designation. Lastly, a history of missed payments or a poor credit score could also bump up your perceived risk level.

Ultimately, what makes someone “high-risk” depends on the insurance company, and how likely the driver is to make a claim of any kind. The consequences of being labelled high risk can vary from more expensive premiums or an outright refusal to renew your car insurance.

Can you be turned away for car insurance for being high-risk?

Typically, if one company refuses to give you a policy, you may have problems getting coverage elsewhere. But since auto insurance is mandatory for all drivers, the insurance industry cannot prevent you from getting insurance. Just know that you have options when it comes to getting insured.

High-risk car insurance companies

Insurers that focus on high-risk drivers provide coverage for those with different profiles than standard insurance companies. Other companies may charge high-risk drivers higher premiums or drop their coverage at the end of a term — They do this to keep rates lower for drivers who are not high-risk.

High-risk car insurance companies may offer better rates simply because they specialize in this select group. Part of their intent is to help drivers rebuild a good driving history.

The Facility Association

In most provinces in the country, an insurance policy can be arranged through the Facility Association. The Facility association is an insurance pool that brings together licensed insurance companies in the provinces in which they operate to make sure everyone has coverage. It is considered the insurer of last resort. The Facility Association also works with drivers to improve their records and eventually, lower their premiums.

How to reduce your risk level and/or insurance premium

If you’ve been deemed a high-risk driver in the past, that doesn’t mean you’re condemned to expensive premiums for the rest of your driving life. There are ways to lower your insurance rate by making big and small changes to your life.

  • Instal anti-theft devices and more safety features to your car to prevent any unanticipated claims in the future.
  • The next time you’re in the market for a new car, you can also avoid buying one of the most stolen vehicles in Canada.
  • Increase your deductible so the insurance company doesn’t have to pay out as much when you file a claim.
  • Consider enlisting in a safe driving program or a defensive driving course that is recognized by your insurance company. You may be able to qualify for a discount from your provider, plus you’ll learn good habits to keep your record clean in the future.
  • On that note, maintain safe driving habits! Driving infractions and violations can stay on your record for a handful of years, but very few are forever. Drive responsibly, and eventually you can shed that high-risk designation just by maintaining a clean driving record.

Discover your options for high-risk car insurance

Drivers should know their driving record to improve future options in terms of insurance carriers and premium costs. After a certain period with a clean history, you can find even more ways to reduce the expense of auto insurance. However, no matter your risk category, you can always go online to shop around for the best rate on auto insurance.