High risk auto insurance 101


Are you considered as a high risk when it comes to auto insurance companies? Are you insuring a teen, a senior or a high powered sports car? It’s no longer a secret that high risk insurance costs considerably more than normal insurance policies. Although the market has evolved to a state where there is hope for high risk drivers and more and more companies don’t believe in classifying drivers as high and low risk drivers. 

What is high risk?

Insurance companies calculate a risk factor each customer can mean to them. This is basically a numerical representation of the odds they will make a loss to a profit by insuring you. The higher the figure the higher of a risk your policy is to the company; you share part of this risk by paying a much higher premium thus increasing the chances of a profit and leveling the playing field. 

Who qualifies as high risk? 

Well a lot of people, so don’t despair yet. Teens, seniors, drivers of high performance cars, modified cars, sports cars and muscle cars among others all qualify as high risk drivers. Something as simple as living in a rough neighborhood, where the crime rate is relatively high can make you a high risk case. 

What you can do: 

Approach many companies for quotes 

Multiple quotes are a simple first step that is common with general low risk insurance to getting a better deal. The more companies you approach and the more quotes you collect the better your chances are of striking the perfect deal. 

Approach specialist companies 

There are specialist companies who cater to only high risk customers. Approaching such a company doesn’t warrant a lower premium but it’s a good place to start. This is an obvious step for people who are considered as such a high risk that a normal insurance company will not insure them. Many specialized companies view senior citizens as more experienced drivers, teens as the great drivers of tomorrow, and sport-car enthusiasts as responsible aficionados.

Analyze quotes 

Analyze the quotes you receive, compare value for money. That is compare the premium amount, and the cover you receive. Choose a policy that provides you with adequate cover without breaking the bank. 

Policy duration 

Once you find a deal suitable for you, ensure that it matches your budget and usage pattern. Many a time you can strike a better deal with your insurance provider if you take an extended policy. They appreciate the long term business and offer you a lower premium and/or discounts and loyalty benefits.

Avoid monthly installments 

Monthly installments are known to attract interest rates at most insurance companies, if you must take monthly installments try finding a company which doesn’t charge a monthly installment. 

Collected knowledge 

Speak to other friends who may be in the same situation as you and ask where they get their insurance and how much they pay. 

Safety features 

The installation of safety equipment such as ABS or even better tires can help you save a pretty penny on your insurance premium, as they make your car safer and less likely to crash. Anti theft systems are also preferred as they decrease the chance of your vehicle getting stolen. Such upgrades to your car translate to a lower risk value for you, and hence a lower associated premium. Be sure to inform your insurance company of all such upgrades.