Car insurance customers are categorized according to their potential risk. Risk categories can play a factor in how the insurance provider decides what you pay for coverage. Primary categories of risks auto insurance companies use are:
Ultimately your classification and your premiums are determined by how much risk you pose for the auto insurance company.
But suppose you've had a major accident, coverage lapse, or other concerning offense. If you're considered high-risk, you may be in the nonstandard auto insurance category. What can you do if you're labeled high-risk? Read this helpful resource guide on nonstandard auto insurance.
Nonstandard auto insurance is a category of car insurance for drivers labeled high-risk due to past driving offenses, lapses in auto insurance coverage, or other major risk factors. Nonstandard policies are similar to the same as standard policies, but they cost more to make up for the higher risk of a nonstandard driver.
Both categories of insurance protect you, your vehicle, and—depending on your specific policy—other individuals in your vehicle and other vehicles in the accident.
The main differences between standard and nonstandard auto insurance are:
The policy premium
The fact that not every insurance provider offers insurance to drivers they deem high-risk
Get your nonstandard auto insurance quote now.
Your driving record, history of insurance coverage, age, and other factors are taken into consideration when you buy car insurance. Some of the reasons a car insurance company might only offer you nonstandard car insurance include:
You could be placed in the nonstandard category if you have a history of violations. This includes drivers who have been involved in serious accidents or have committed violations in the past, such as:
Driving a car with no insurance
Driving without a license (or with a suspended or revoked license)
Committing any other traffic violations resulting in citations
Drivers with violations present a higher risk for insurance companies. This risk increases the more violations a driver has on their record.
Insurance companies consider certain types of drivers more likely to commit the same offense in the future:
• An uninsured motorist
• A repeat DUI offender
• A driver who's been in multiple accidents
Some states require drivers with multiple offenses to get an SR-22 certificate (or an FR-44 in Virginia and Florida). An SR-22 is a statement from your insurance company proving you carry insurance on your vehicle. Some auto insurance companies charge higher rates or fees for policyholders who must obtain an SR-22 form.
One of the first questions an auto insurance company will ask you is: Do you currently have insurance?
A lapse in insurance coverage won't automatically put you in the nonstandard auto insurance category, but too many lapses of time with no auto insurance can make you appear risky to a potential insurer.
Your age plays a role in your car insurance classification, too.
Younger drivers: Young drivers, especially first-time drivers, are statistically more prone to accidents because they lack driving experience.
Older drivers: While more mature individuals have years—sometimes decades—of driving experience, they may be classified as needing an insurance policy for nonstandard auto for other reasons, like slower reaction times, poor vision, diminished physical abilities, or other health problems.
Like an auto insurance coverage lapse, a foreign driver's license doesn't automatically place someone in the nonstandard auto insurance category—but the insurance provider will examine other factors, such as those mentioned above, and whether the driver has a driving record in the U.S. If the insurer can’t access a driving record to gauge potential risk, the person may be considered nonstandard.
Having a low credit score doesn't disqualify you from getting a car insurance policy, but it may affect how much you pay for your policy. Your credit score is typically used by other entities, such as banks or other lenders, to determine your creditworthiness when applying for a loan.
An insurance company may look at items in your credit report to gauge your financial responsibility, creating an “insurance score.” Policy applicants with a low credit-based insurance score may be classified as nonstandard.
If you don't own a car but you have to drive a vehicle to get to work or have other responsibilities that require you to drive, you’re not necessarily considered a high-risk driver. Your auto insurance provider may still classify you as a nonstandard driver and offer you non-owner auto insurance, protecting you in the event of an accident while driving someone else's vehicle.
Your policy also acts as supplemental insurance for the vehicle owner to help pay for any damages not covered by their primary auto insurance policy.
Here's a breakdown of what to expect with a nonstandard car insurance policy.
Being labeled nonstandard means your policy premium could be higher than your standard auto insurance counterparts because you’re deemed to be a certain risk level.
An insurance policy deductible is the amount of money you’re responsible for paying before your insurance company will pay a claim.
When you've been involved in an accident, submitting a claim is a pretty straightforward process, whether you're a standard or nonstandard insurance customer.
A nonstandard insurer is just what it sounds like—an insurance carrier that sells nonstandard auto insurance policies. Some car insurance companies only sell one type of insurance classifications, while others may sell multiple.
Not all insurance carriers offer nonstandard policies. When you need a car insurance policy and think you may fall into the nonstandard category, it's a good idea to look at several options to find coverage within your budget. Some nonstandard auto insurance carriers offer special rates for high-risk drivers.
Having a nonstandard classification isn't the end of the world. Drive protected: Get a free auto insurance quote today. Drive protected: Get a free auto insurance quote today.
The general information in this blog is for informational or entertainment purposes only. View our blog disclaimer.
*Data accuracy is subject to this article's publication date.