7 Best Companies to Get High Risk Auto Insurance

In the past, one near certainty following an accident in which a driver was at fault was that the driver’s auto insurance company would decline coverage at the next renewal date. This happens much less frequently now that states have made provisions for insurance companies’ relationships with high risk drivers. Even so, there are some companies that deal better with high risk drivers than do some other, smaller companies. Try our FREE quote comparison tool on our website today!!

Reinsurance Pools

All auto insurance companies in the United States are regulated by each state in which they operate. In turn, each state has its own laws and rulesregarding who must have access to auto insurance.

No state will require any company to insure a multiple DUI offender, of course, but many states provide options for insurers for drivers they see as being high risk, and perhaps high cost to them. There are various plans throughout the country, but most can be seen as variations on a state’s “reinsurance pool” where premiums are much higher than they are for the mainstream customer.

A driver with several speeding tickets or an accident in which he was at fault can find himself reassigned by the state auto insurance regulatory body to the state’s reinsurance pool. There, coverage remains the same but premium prices are much higher. The driver generally stays in this pool until some or all of his driving offenses age out of his driving record. For the time that the state has assigned the driver to the reinsurance pool, any state – approved car insurance company is at liberty to charge very high premium prices.

Why Reinsurance Rates Stay High

Any driver whose state has assigned him to such a reinsurance program needs to understand that his auto insurance company is unlikely to reduce his premium when the state no longer requires that the driver be included in the reinsurance pool. Instead, the company will continue charging high premium rates until the customer initiates a reason for the company to reduce his rates and return him to the standard rate tables. Once the state has assigned a driver to the reinsurance pool, the auto insurance company is allowed to dramatically increase his premium rates. In most states, there is no requirement that states that any auto insurance company has to reduce premium rates when the state no longer includes the individual in the reinsurance pool.

Getting Out of the Reinsurance Pool

Most companies will continue to charge reinsurance rates until confronted with some action on the part of the customer. Simply asking the company to reduce premium rates may or may not have any effect on premium rates. Showing the current auto insurance company a lower quote from one of its competitors is likely to produce highly favorable results, however. Though the company receives less per-customer revenue from standard risk customers, it receives no revenue from the customer who leaves for a competitor’s services. When the term of reinsurance pool inclusion ends, the company likely will meet or exceed any lower quote from a competitor. This requires that the driver makes some active comparisons between several companies, of course.

Which Companies?

Each state requires a certain number of different types of auto insurance companies operating within it to provide insurance to high risk drivers. The definition of high risk varies from state to state, as do each state’s list of companies required to offer affordable auto insurance to high risk drivers. All insurance companies of all types are masters of statistical analysis. They are adept at balancing risk and reward. They understand that there is a high probability that they will be paying one or more claims for any high risk driver.

For these reasons, smaller insurance companies with fewer customers and less capital generally do not want to participate in high risk insurance.

The more customers an auto insurance company has, the less risk any one customer presents to the company.Thus the larger auto insurance companies generally are the best to deal with for the high risk driver.

In 2009, the following companies were the largest in terms of their share of the total U.S. market:

• State Farm, 18.6%
• Allstate, 10.5%
• Geico, 8.2%
• Progressive, 7.5%
• Farmers, 6.4%
• Nationwide, 4.5%
• Liberty Mutual, 4.4%
• USAA Insurance, 4.1%
• Travelers, 2.1%
• American Family Mutual, 2.0%

A market share of two percent may not seem large, but there were more than 240 million licensed drivers in the country in 2006. Two percent of that number is 4.8 million potential customers for American Family Mutual. For State Farm with its 18.6 percent share of the total market, it is 44,640,000 customers. High risk drivers carry much less company risk for the company with 44.6 million customers than for the company with 4.8 million customers.

The Bottom Line

The driver who finds himself in his state’s assigned risk pool should compare rates offered by the first seven companies in the above list of the country’s top ten. One of the smaller companies may be able to offer lower high – risk rates, but the greatest probability of lower assigned risk premiums lies with the top seven by market share. Every driver needs to compare rates, not only at the time of purchase but also every year or so. The leading companies above provide good places to begin. Enter your ZIP code into our FREE quote comparison tool and start saving today!