Car insurance is something you need before you get behind the wheel and a good driving record can translate to lower premiums. If your driving record is spotty, or your have poor credit, however, you may only qualify for high risk auto insurance. That can drive up the expense of getting covered.
But just how expensive is high risk auto insurance? Here’s what you need to know about paying for high risk coverage — and what you can do to cut your premium costs.
Who’s a High Risk Driver?
Different insurers may have different criteria for determining who falls into the high risk category. Generally, though, you might be assigned high risk status if:
- You’ve been convicted of driving under the influence (DUI)
- You’re a young or first-time driver
- You’ve allowed your existing car insurance policy to lapse
- You have accidents or other driving violations (like speeding or reckless driving) on your record
- You have a poor credit rating
That last one’s important to note because it may not seem like your credit score would have an impact but it does. If your credit report shows a history of late or missed payments, or other irresponsible financial behavior, your insurer may view you as more of a risk.
Adding Up the Cost of High Risk Auto Insurance
There’s no standard fee for high risk car insurance. Instead, your premiums are based on where you live, your age, driving record and credit rating.
In Maine, for example, the average annual premium cost for a high risk policy is $584, according to ValuePenguin. In Michigan, however, the average high risk driver pays $2,766 per year for auto insurance.
Across the board, high risk auto premiums rise for drivers with speeding tickets, DUIs and accidents on their record. Young drivers face the highest premiums for high risk coverage, ranging from $900 in Hawaii to $11,271 in Michigan.
Qualifying for a Standard Auto Insurance Policy
If you’ve been deemed high risk, there are some things you can do to become eligible for a standard policy. A standard rating would likely carry lower premiums.
Focus on cleaning up your driving record. You may be able to erase points against your license by taking a defensive driving course, for example. In the meantime, remember to obey all traffic laws and keep your license, registration and insurance up to date so you don’t run the risk of landing a ticket.
The other piece of the puzzle is your credit. Check your free credit score with Credit Sesame to see where you stand. If your credit’s not that great, consider using a card like the Barclaycard Arrival Plus™ World Elite MasterCard® to bring it up. This card allows you to earn 2X miles on every purchase and you can establish a positive payment history when you pay on time each month.
As your credit improves, remember to shop around for the best deal on auto insurance. Compare rates for standard policies to see which insurer is the most budget-friendly.