What Is Commercial Auto Assigned Risk?

By Mike Anderson Posted in Car Insurance News

Auto insurance companies determine whether or not to provide insurance coverage to individuals, and at what premium based on that driver’s projected risk. If for example, a motorist is looking to buy car insurance but has several moving violations on his or her record or multiple accidents in the recent past, that driver may have a hard time finding an insurance company that will provide them with insurance or one that will provide a policy at an affordable rate. Because there are numerous drivers that have such poor driving records that no insurance company will normally provide them with auto coverage, the state government has to step in. State law requires that insurance companies provide commercial auto insurance to high-risk drivers. This program is known as assigned risk, and drivers that fall into this category are required by insurance companies to pay very high premiums. This category of drivers is also known as the “shared market” or the “residual market.”

By law every car insurance company must take on a certain number of drivers that fall into this assigned risk market. The number of assigned risk clients that companies must provide insurance coverage for is determined by the number of standard insurance policies that each company sells. According to a recent report published by the AIPSO, 1.2 percent of auto insurance policies sold in 2006 were written to drivers who fall into the assigned risk pool.

Drivers In The Assigned Risk Market Will Have To Pay High Premiums

Assigned risk insurance is available for all vehicles including personal and commercial cars and trucks, motorcycles, recreational vehicles, and more. Each state has certain criteria that a driver must meet in order to be in the assigned risk market. Once a driver qualifies for assigned risk insurance, he or she will be able to purchase an insurance policy despite having a poor driving record. Although these drivers will have to pay very high premiums, shopping around different companies to find the best quote is always recommended.

Related posts:

  1. What is Private Passenger Assigned Auto Risk Insurance?
  2. How Does Assigned Risk Auto Insurance Work?
  3. Is Commercial Auto Assigned Risk Different Than Private Passenger Risk?
  4. Who Offers A Good Student Driver Discount?
  5. How To Get A Affordable Auto Insurance Policy After A DUI Or DWI?

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