In order to understand what the cases when you need assigned risk insurance are you first need to puzzle out what this type of insurance is. The answer is quite simple. Assigned risk insurance is designed for the riskiest drivers and driving. And it will be required for you to have this kind of policy before acquiring your driving license. But if you belong to the category of the riskiest drivers getting this kind of policy will be difficult.
Drivers who belong to risk category of certain level are usually associated with assigned risk insurance. There are various factors that make a driver risky, including young age or living in a specific area with high risk. For example, if there is a high crime rate in a certain city or if a city has many insecure intersections, this city and its drivers can belong to the category which would require assigned risk insurance.
However, the assigned risk system works not in all states. Insurance businesses are free to conclude or to refuse their customers in the provision of auto insurance. And assigned risk insurance is needed in those cases when an insurer refuses to provide a policy to a customer for the reason that the customer belongs to a category with high risk.
The State Can Help
Even though you have a decent driving record or background, just living in a specific place may be considered as a factor that will require you to have assigned risk insurance. Besides, if you have a very expensive vehicle that can be stolen or a vehicle that is likely to be damaged in result of a collision, you will be also required to have assigned risk insurance. And when it is required, expect your insurance rates to be increased.
And what is everything is combined? For example, you are under 25, live in dangerous area, and have not the best driving record. In this case, it will be difficult for you even to find an insurer that will provide you coverage. This is a difficult situation especially given a fact that you have no right to drive in the United States if you have no insurance policy. For this reason, assigned risk insurance can become the only available solution of the problem.
And in this case assigned risk insurance will be really helpful. The majority of states provide special assigned risk plans for those individuals who belong to categories with high risk. And if there are no companies that agree to insure you, you will be able to purchase such plan. However, it will be pricier than a regular one. What are the opportunities to apply for this type of policy?
Two Opportunities to Purchase Assigned Risk Auto Insurance
The simplest opportunity is to consult with an insurance agent. The process of acquiring this kind of insurance always involves an insurance company, which handles underwriting, while the insurance program itself is provided by a state. You insurance agent will first attempt to contact a commercial insurer to find out whether you qualify for normal coverage. Then, after three denials from commercial insurers, your agent will be able to send a form of assigned risk insurance to the specific state department.
In this letter it will be explained that you belong to a category of high risk and will need assigned risk insurance. But you can also apply by your own by calling to your state insurance department. And the department, in its turn, will establish your contact with an insurer that will agree to work with you. To get more details, contact the Department of Motor Vehicles. The department will provide you any useful information you require.
What does an assigned risk insurance policy include? There is the minimum amount of coverage that’s required by the law of a state, and the policy is limited to this amount. And you should expect higher rates since the risks are higher. But the benefit is that this policy will finally cover you, so you will be able to drive safely and according to the law. And you will probably agree that this solution is very effective.
After some time, you may discover other ways to make your insurance more affordable or change your company. In the future maybe you will qualify for insurance with better rates. In order to be able to do so, you should keep your record of driving clean during three years (and don’t miss payments). After this, you we will have an opportunity to acquire another type of insurance and forget about assigned risk insurance.
Are There Any Other Options?
There are some states where assigned insurance is not needed. In such situation you can search for a non-standard insurance policy provided by a private company. For this reason, don’t forget to shop around before clearly deciding that an assigned risk policy is the only available choice.
Besides, you should also keep yourself informed about non-standard programs in insurance. If you get turned down once, it doesn’t mean will be getting turned down all the time. Follow changes in insurance rules, and it will help you to save both your funds and money.
Generally speaking, assigned risk insurance is an effective solution for both high-risk drivers and insurance companies. Although you may be unhappy with being referred as a risky driver, you must accept it because insurers have their rights too. And you also should know that later you may qualify for other type of insurance.