How Does Assigned Risk Auto Insurance Work?

By Lisa Olsen Posted in Car Insurance News

Drivers who have had multiple accidents, a history of not maintaining their car insurance or a bad driving record are considered high risk. In these instances it can be difficult to obtain car insurance. Some states will use an assigned risk system to make sure these high risk drivers are covered by insurance.

Assigned Risk

Any driver who is deemed uninsurable by the commercial auto insurance companies becomes an assigned risk driver. Each state has their own system for calculating who qualifies as an assigned risk but typically it’s someone with a very poor driving record. Having multiple driving violations and multiple accidents (where you’re at fault) can give you a poor driving record.

In order to ensure that these high risk drivers are not driving around without auto insurance states will assign these drivers to a state-run insurance company that will insure the driver at a very high rate. The upside is that these high risk drivers will be insured the downside is that the premiums are so high that many can not afford the insurance and simply go without it.

Insurance Is A Must-Have

If you are unfortunate enough to become an assigned risk driver it may be tempting to forgo the insurance altogether. However, not only is this against the law it is also dangerous and very risky financially. If you were to be involved in an accident where you were at fault and the other driver sustained any injury you would be held liable for any medical bills and repair bills resulting from the accident. On top of that you could get jail time for driving without insurance.

Once you have been convicted of driving without insurance it is nearly impossible to receive auto insurance even through the assigned risk program. Some states may even revoke your license for a number of years or indefinitely.

Related posts:

  1. What Is Commercial Auto Assigned Risk?
  2. What is Private Passenger Assigned Auto Risk Insurance?
  3. Is Commercial Auto Assigned Risk Different Than Private Passenger Risk?
  4. How Can Points Affect My Car Insurance Rates?
  5. Which Insurance Companies Do Not Look At Your Driving Record?

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