High Risk Auto Insurance

May 29, 2008

Do you know what factors most insurance companies look for to determine whether or not you are a high-risk driver? Usually, simple common sense will tell you when you think about your driving record. If you think that there is information contain in it that is troublesome, chances are the insurance company will, too.

If your driving record is not good, you are going to be considered a high-risk driver immediately. It doesn’t seem fair, as you have no chance to explain what happened, but this is the way the insurance companies operate. Not only do they look for motor vehicle accidents where you were at fault, but at no-fault accidents and any tickets you may have received as well. The auto insurance company considers each speeding ticket you have received as bumping up your chances of being involved in any sort of traffic accident by 100%. They also consider that any involvement you may have in multiple car accidents may indicate that you have a habit of reckless driving, whether you are at fault or not.

Insurance companies also like to use personal profiling as a tool to help them figure out whether or not you might be a higher risk than the average person who has auto insurance. The standard reference that they go by is that men are always a greater risk that women, teenagers are always a greater risk that adults, and people who live in the city are a greater risk than those people who live in the country.

The insurance companies also will do some checking to see if you have had continuous insurance coverage with some company, not necessarily theirs. If for some reason you have not, this is a signal to them that the last policy you had got canceled for some reason, or that you have just been driving without having insurance coverage. Either circumstance could cause the insurance company you have chosen to work with to put you in a high-risk category.

What seems really unfair, as the two seem to have nothing in common, is how insurance companies will profile you according to your credit history. If you have bad credit, you are going to be placed in the high-risk category, and that’s just the way it is. The reason for this is that research has been done and the resulting statistics prove that someone who has bad credit usually files more claims with their auto insurance company over a period of time. Of course, having good credit can work in your favor and slide you over in the direction of the “good risk” category.

You can easily remove yourself from the high-risk category, but it may take some time. You’ll have to straighten out your credit by catching up on late payments and do what it takes to clear up your driving record. You really should attempt to get out of this category, as it is costing you more money to be there than you may think.

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