High risk is a term that can apply to a lot of things right now, like traveling and gathering in large groups and, yes, even driving. However, it is not the act of driving but the driver that is high risk. Those who are stamped with being high risk means that they could lose eligibility for some insurances. Yet, most people do not realize there are certain things that can impact their auto insurance rates that are not obvious.
Here are several things that designate a driver as high risk:
Are You a High Risk Driver? Here Are The Signs
When it comes to getting auto insurance, you need to know whether or not you are considered low or high risk. The main difference between the two is that those who are considered to be a low risk driver will have less of a chance of filing a claim, whereas those who are high risk have a greater chance of filing insurance claims.
You Don’t Have a Great Credit Score
Many Americans these days struggle with maintaining good credit, especially if you are dealing with student debt and other financial struggles. Although insurance companies cannot deny you for having poor credit, you may receive a higher rate. See, credit scores are a gauge for financial stability and responsibility, so if you have made mistakes in the past and are still paying for it, you are considered high risk.
Those who have good or excellent credit scores may be eligible for a Financial Stability Discount from some insurance providers, so now is the time to look into ways to lower your risk.
Never Had Auto Insurance Before
Driving without car insurance is illegal, so you want to have it as soon as possible. There are also no exceptions for those who have never had auto insurance before now. If you have a driver’s license and a vehicle, most insurance companies are going to assume that you have been driving without insurance at some point. That translates into a high-risk rate now.
You Are a Young Driver
Nothing makes you more of a high-risk driver than being new behind the wheel. Teenagers and those who have no driving experience have a higher chance of getting into accidents, which heightens the chance of filing a claim. All new drivers go through something of a probation period where the rate is higher. Once you have established yourself as a good driver, the rate should decrease.
Too Many Traffic Violations, Tickets, or Accidents
Sadly, even on minor violation or accident, even if it was not your fault, will increase your insurance premium. It is certainly frustrating to have a slip-up several years ago only to have it haunt you again when you go to get a new insurance policy. Some carriers have introduced Accident Forgiveness, but that is an extra option that costs you a small fee.
Now, the more violations you have, the greater risk you pose. In fact, if you have multiple traffic violations that total over six points, you may lose eligibility for a preferred insurance carrier. Note that a ticket does not need to be issued in order for insurance points to be placed on your record.
DUI or DWI
Have you gotten a DUI or DWI recently? You may have received a notice of cancellation from your insurance provider. If you didn’t consider yourself lucky. Most insurance carriers do not allow for a major violation, such as driving while intoxicated. The DUI/DWI will also stay on record, so that will affect rates later on.
You Are Single and Don’t Own a Home
Since some insurance companies have something called a homeowner discount, where people who own homes pay less for auto insurance, it is the opposite for those who rent. Insurance companies believe that buying and affording a home means you are stable and responsible.
Again, this only applies to some insurance policies. Many do not consider home ownership as a deciding factor.
Yet, what home ownership can determine is whether or not you are married or a parent. Married with children brings with it more discounts for you and more stability (and a promise of safer driving) for the car insurance company.
Who is Considered a Low-Risk Driver?
Even if you have a pristine driving record, there are some things that insurance companies look at that you cannot change, like your age, gender, and the distance from your current place of employment.
Insurance companies consider the following low-risk populations:
- Women
- Adults (25 years or older)
- Rural address/residence
- Married
- Parents
For example, if you are a 30-year-old woman who has been driving for many years, has never gotten into an accident, and lives far from the city, you will be considered low risk. Meanwhile, a 23-year-old male college student with bad credit and an apartment is considered high risk.
Yet, many policies and rates will decrease over time. Regardless, you can work actively towards becoming a better driver and decreasing traffic violations. The more reputable your history, the better off you will be.
Conclusion
Do you fall into some of these categories? You may be paying more than low-risk drivers because of it. Just remember that the longer you go without tarnishing your record, the less you will have to pay—eventually. Understanding what a high-risk driver is happens to be the first step!
Are you a high-risk driver in need of affordable vehicle repairs? Get in touch with us by filling out the contact form. We look forward to hearing from you.