Is Commercial Auto Assigned Risk Different Than Private Passenger Risk?

By Sharon Gibson Posted in Car Insurance News

This is not a description for “private passenger” assigned risk, but the question asks about COMMERCIAL assigned risk – which is insurance for taxis, fleets, trucks, etc. – they’re not the same thing at all.  That is generally handled via a different mechanism than private passenger, and there are usually only a small number of carriers (called “servicing carriers”) who are designated to actually write commercial assigned risk policies on behalf of all the commercial auto carriers in any given state. The rest participate financially in the operating results of the servicing carriers in proportion to their share of the voluntary commercial auto market.

Drivers Are Assigned

Drivers are generally placed into assigned risk not by choice, but because their agent has determined that they can’t be insured any other way – meaning they have no other option. All companies in a state must use the same rates to write their assigned risk business, so there’s no price difference to exploit.  And most states’ assigned risk mechanisms have automated systems set up to place a specific applicant with the same carrier if he/she applies more than once – specifically to discourage drivers from applying, canceling, and re-applying in an effort to “game” the system to get placed with a preferred carrier.  If drivers apply multiple times, all it does is drive up the cost of administering the assigned risk plan for everyone else.

Related posts:

  1. What is Private Passenger Assigned Auto Risk Insurance?
  2. What Is Commercial Auto Assigned Risk?
  3. How Does Assigned Risk Auto Insurance Work?
  4. Does US DOT Study On Commercial Driver Distraction Mean Rate Hikes?
  5. If I Need A Commercial Car Insurance Quote, How Do I Go About Doing It?

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