May 18, 2011

Finding Out Whether You Are A High Auto Insurance Risk

You may have never paid much attention to it, but when you apply for auto insurance policy, you might find out that insurance companies consider you a high risk. While this can come as a shock, it can seriously affect your auto insurance policy rates. All insurance companies have their own auto insurance risk categories and there could be many reasons for you to be considered a high risk.

Insurance companies use auto insurance risk categories to determine if an individual is a high risk and to determine the amount of premium to charge. Based on the jurisdiction, the auto insurance premium is decided by either the government or the insurance company. In most cases, auto insurance companies will have more freedom with setting the price on physical damage coverage than the compulsory liability coverage.

Auto insurance companies use several aspects to classify a driver as high risk. Most insurance companies consider teenagers, young and new drivers as risky because of their lack of driving experience. If you have a DUI or DWI in your record, you will find yourself in the high risk category. Similarly, if you have been involved in several accidents or received speeding tickets, it may not go down well with insurance companies. In addition, men in general are considered to be high risk drivers. Sometimes, your credit history can also play a part in labeling you as risky.

In addition to the above mentioned reasons, insurance companies will categorize you as a high risk driver if you have had a single conviction, guilty plea. If you are considered to be a high risk by insurance companies, they may decline your auto insurance application. On the other hand, even if you manage to find an auto insurance policy, the premium might be extremely high. However, not all is lost and there are ways to find reasonable auto insurance policies, even if you are a high risk driver.

If you have been a bad driver, you could start by going for defensive driving programs that are specifically designed to improve your driving skills. You could find out if there are any specific courses that are recommended by your insurer. This will ensure that you get a lower rate after you have completed the program. If your credit history has been bad, it is time to work on improving your credit rating. This can be done by developing a better culture behind the wheels, avoiding making minor claims and looking for insurance-friendly vehicles.

Even if you are high risk driver, with the right approach, it is possible to improve your chances of finding an affordable auto insurance policy. All it takes is some determination and some research.