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What Is High-Risk Auto Insurance’s Average Cost?

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Many drivers are classified as “high-risk” by insurance companies, including young motorists and those with numerous accidents or infractions in their driving history. Drivers who receive that label pay much higher rates than those who are considered low-risk.

In this article, we examine high-risk auto insurance average cost and ways to lower your auto insurance premium if you fall into this category.

But remember, the only way to know with certainty how much you will pay for car insurance is to get a quote. This is because pricing varies depending on your location, vehicle, and more. Enter your zip code below to start comparing the best car insurance companies in your area.

 

In This Article

What Is High-Risk Auto Insurance?

High-risk auto insurance is insurance sold to drivers with an increased risk of getting into an accident or not paying their insurance premium. High-risk drivers are offered the same insurance coverage plans as low-risk drivers, but at increased prices.

Drivers that might be considered “high-risk” include:

  • Drivers convicted of Driving Under the Influence (DUI) or Driving While Intoxicated (DWI)
  • Uninsured drivers who experience an at-fault accident
  • Drivers with multiple speeding tickets or traffic offenses
  • Drivers involved in vehicular assault or other violations involving negligence or severe endangerment of other drivers and/or pedestrians
  • Young drivers or drivers with little experience
  • Drivers with bad credit
  • Drivers who have lapses in their insurance coverage

If a high-risk driver has had their license suspended or revoked, they may be required by the state Department of Motor Vehicles (DMV) to have an SR-22 form filled out by their insurance company before driving privileges can be reinstated.

What Is An SR-22?

An SR-22 is an official document proving that a driver bought a minimum level of liability coverage, a type of insurance that covers bodily injury and property damage caused by an accident.

Drivers that often require an SR-22 include:

  • Drivers convicted of a DUI or DWI 
  • Uninsured drivers who experience an at-fault accident
  • Drivers involved in vehicular assault or other violations involving negligence or severe endangerment of other drivers and/or pedestrians
  • Drivers with multiple speeding tickets or traffic violations

Whether or not an insurance company will fill out an SR-22 for a driver is dependent on whether it sells high-risk auto insurance. Once an SR-22 form is received by a state’s DMV office, the state may reinstate the driver’s license.

What Is the Average Cost Of High-Risk Auto Insurance?

Because there are many different types of high-risk drivers, it’s difficult to provide a single average cost of high-risk auto insurance. According to Investopedia, a high-risk driver generally pays 10 to 50 percent more than a driver in the same age range that is not high-risk.

In our research into average car insurance rates by age, we found that 30- to 39-year-old drivers in general pay an average of $1,449 per year for car insurance. A high-risk driver in that age range could pay between $1,594 and $2,174 per year.

Which Providers Sell High-Risk Auto Insurance?

Many providers sell high-risk car insurance. In fact, Progressive started by providing insurance to risky drivers. In addition, Geico, State Farm, and The General are major insurers of high-risk drivers. Some other sellers of high-risk auto insurance include Dairyland and Infinity.

While all of these providers sell high-risk auto insurance, there is no guarantee you will receive an offer from every provider. If your risk is high enough that the insurance company will not make a profit from your business, the company can legally deny you coverage.

What Should I Do If I’m Denied Coverage?

If you are denied coverage because of your risk level by one auto insurance provider, you should call other insurance companies to see if those companies will insure you. Different providers are willing to take different levels of risk, and there is a good chance that you will find a provider willing to insure you.

If you have called several providers and none have offered you coverage, here are some steps you can take according to the Insurance Information Institute (III).

  1. Join a state assigned risk pool. Auto insurers participate voluntarily in state assigned risk pools. Each insurer that joins the risk pools must accept motorists assigned to it by the state.
  2. Look for car insurance companies that advertise coverage for high-risk drivers. If you’ve called a few insurance providers and have been denied, you might search specifically for companies that advertise high-risk driver coverage, like The General or State Farm.
  3. Contact your state insurance department for help. Your state insurance department will likely be able to help you find a car insurance company that will insure you.

How Can I Lower My High-Risk Auto Insurance Cost?

The Insurance Information Institute recommends that you take these steps to lower your high-risk auto insurance cost.

    • Take a defensive driving course to improve your driving skills. If you are a teenager, you may be able to get a discount for completing such a course.
    • Never drink and drive. Make sure you always call an Uber or have a designated driver.
    • Drive safely and obey traffic laws. By avoiding accidents and traffic citations, you can improve your driving record over time.
    • Improve your credit score. Some of the ways you can do this are paying your bills on time and paying off any existing credit card debt.
    • Buy a safe car. Cars that receive high vehicle safety ratings typically cost less to insure, while also providing peace of mind.

Our Recommendations For Car Insurance

While many providers offer high-risk auto insurance, three stood out in our research: Progressive, Geico, and State Farm.

#1 Progressive: 4.5 Stars

Progressive began as an insurance company for high-risk drivers, and it continues to offer high-risk policies for most drivers. Our review team named Progressive auto insurance the best for high-risk drivers because of its great discounts for this group.

According to Progressive, Progressive drivers save an average of $750 on their policy through the company’s discounts. 99 percent of its auto customers earn at least one discount. It is important to note that some discounts are only available in certain states.

Here are a few examples of Progressive discounts that can lower the price of high-risk auto insurance:

  1. Teen discount: Teens have higher rates than other drivers, and Progressive offers discounts to those 18 years or younger to encourage them to join Progressive.
  2. Student discount: Students who earn a B average or better earn a car insurance discount with Progressive. In addition, college students who are more than 100 miles from their parents’ residence are eligible for a discount.
  3. Sign online discount: Progressive drivers save an average of 8.5 percent on their policy for simply signing documents online.

#2 Geico: 4.5 Stars 

Geico Casualty, the high-risk subsidiary of Geico, uses a points system to determine how much an individual will pay for a particular policy. It factors in how recent a high-risk driver’s accident or traffic violation was, for instance. We think that its points system can benefit high-risk drivers who have been driving safely for at least a year.

In addition to its helpful points system, Geico offers roadside assistance, rental car reimbursement, and mechanical breakdown insurance. A large number of discount opportunities are also available to help you save money on car insurance.

#3 State Farm: 4.5 Stars

Like Progressive and Geico, State Farm offers outstanding coverage, an affordable cost, and has great customer service ratings. State Farm auto insurance is our first choice for students nationwide. In addition, State Farm offers the lowest rates to drivers with a DUI in over 20 states, according to Investopedia.

With State Farm’s Drive Safe and SaveTM program, you can save money on the cost of high-risk auto insurance. During the program, a telemetric device or an app on your phone tracks the way you drive. If you drive safely, including easy accelerating and braking, you can receive sizable discounts.

Deciding Which Provider Is Right For You

Whenever you shop for car insurance, we recommend getting auto insurance quotes from multiple providers so you can compare coverage and rates. In addition to the insurance company you choose, factors such as your age, vehicle make and model, and driving history can affect your premium, so what’s best for your neighbor might not be best for you.

Use our tool below to start comparing personalized car insurance quotes:

 

Frequently Asked Questions

What is high-risk auto insurance’s average cost?

Since there are many different types of drivers that could be classified as high-risk, it’s hard to provide a single average cost of high-risk auto insurance. A high-risk driver might pay 10 to 50 percent more than a low-risk driver in the same age range, according to Investopedia.

Who has the cheapest high-risk auto insurance?

We named Progressive the best auto insurance company for high-risk drivers for its affordable rates and extensive coverage. Geico and State Farm also provide excellent high-risk auto insurance coverage.

How much more is high-risk auto insurance?

According to Investopedia, a high-risk driver generally pays 10 to 50 percent more than other drivers in the same age group. If your premium was $1,200 a year as a low-risk driver, you might pay anywhere from $1,320 to $1,800 for car insurance after becoming designated as high-risk.

What is considered high-risk insurance?

High-risk insurance will provide you with the same coverage as insurance that other drivers purchase, but you will pay more for the coverage. Drivers with an increased risk of getting into an accident or not paying their insurance premium may be required to purchase high-risk auto insurance.

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Is There a Difference Between No Credit and Bad Credit?

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The short answer is yes, and understanding the difference could be instrumental in getting better credit.

No credit and bad credit often get grouped together. It’s understandable why, as they both sound similar enough. And if you have either, the next step forward is to focus on improving your credit.

The two situations aren’t the same, though. It’s important to know the difference, because the right way to build your credit often depends on whether you have no credit history or bad credit.

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The difference between no credit and bad credit

Having no credit means that there’s not enough information on your credit file to calculate a credit score for you. It’s also known as being credit invisible. Sadly, this is an issue that affects millions of Americans.

There aren’t any problems on your credit file; the credit bureaus just don’t have enough data on you. That means when a lender or any other third party checks your credit, there’s nothing to go on.

Meanwhile, “bad credit” is a common term used to describe a low credit score. That low score is because of negative items on your credit file, such as not paying your credit card bill.

When you have no credit, the solution is to build your credit. When you have a low credit score, the solution is to rebuild your credit. Now, let’s look at how you can do each one.

How to build credit for the first time

Here’s the simplest way to build credit:

  • Open a credit card.
  • Use the credit card for at least one purchase per month.
  • Always pay your credit card bill on time and in full.

It’s that easy; that’s all you need to do to get a good credit score. When you use a credit card and pay the bill on time, you establish a positive payment history. That’s the biggest credit scoring criteria.

The tricky part when you have no credit is finding a credit card you can qualify for. Secured credit cards are one of the most common options for consumers in this situation. You pay a security deposit for this type of card, so it’s possible to open a secured card even if you have no credit.

If you’re in college, credit cards for students are available. These are often an option for applicants without any credit history.

How to rebuild a low credit score

It’s a little more complicated to rebuild your credit. First, you need to find out what negative items are affecting your credit score. Here’s how to start:

  • Use an online credit score tool to check your score and learn about any items damaging your credit. If you have a credit card, there may be a credit score tool in your online account. If not, there are plenty of free ways to get your credit score.
  • Request your credit report from the three consumer credit bureaus (Equifax, Experian, and TransUnion). You can pull a free annual credit report from each bureau, and through April 2022, you can get free weekly credit reports. Your credit report will show you exactly what’s affecting your credit.

Once you know what’s affecting your credit, you can work on correcting it. Below are a few of the most common issues and how to fix them.

Problems with your payment history

This includes anything related to not paying a bill on time, from late payments to having accounts go to collections.

The first step is catching up on your payments. If you can’t pay in full, contact your creditors and see if you can set up a payment plan with them. They may be willing to work with you if that means you’ll be making regular payments.

Next is rebuilding your payment history. The easiest option is to use a credit card at least once per month and pay in full by the due date. Why do you need to use a credit card? Credit card companies report on-time payments to the credit bureaus, which helps your credit score. With other types of bills, your on-time payments typically don’t get reported to the credit bureaus. That means you may not be able to improve your payment history with rent, utilities, or other monthly bills.

If you already have credit cards, you can continue using them to rebuild your payment history. If you don’t, look for secured credit cards and apply for one you like.

Using too much of your credit

A big factor in your credit score is your credit utilization ratio — your credit card balances divided by your credit limits. If this number gets too high, it can lower your credit score. The standard recommendation is a credit utilization ratio of under 30%.

Let’s say you have one credit card with a $4,000 balance and a $5,000 credit limit. That would put your credit utilization at 80% ($4,000 divided by $5,000 is 80%), a very high number that would decrease your credit score.

Fortunately, only your current credit utilization matters. Once you pay down your credit card balance, your credit score will bounce back.

Errors on your credit history

A low credit score may be due to an error and not any action on your part. This is why it’s so important to pull your credit reports from each credit bureau. By reviewing those, you can see if there are any mistakes.

If there are errors on your credit report, you can go to the credit bureau’s website to dispute them online and get them removed.

A low credit score and a nonexistent credit score are both things you can change. After you determine exactly what the issue is, you’ll be able to choose the best solution to fix it.

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‘There is no new normal’: Worcester small business owner pivoted during COVID-19 and expects only more change after pandemic

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It took about eight minutes for the bank to reject Natalie Rodriguez’s application for a loan through the Small Business Administration.

Rodriguez opened Nuestra, a Puerto Rican inspired restaurant in Worcester, in January of 2020. When COVID-19 arrived months later she discovered Nuestra wasn’t eligible for the federal or state funding that thousands of other establishments received.

To qualify, restaurants were required to show payroll and salary for years before 2020. Those figures didn’t exist for a restaurant that weren’t open in 2019.

“[I was] determined and knew that ‘no’ is not an OK answer,” Rodriguez said. “A door may close but you may need to kick down another door.”

Rodriguez then applied for conventional loans only to be led to more closed doors. Less than 10 minutes after applying for an Economic Injury Disaster Loan, she received notice that her poor credit score resulted in her application being denied.

Rodriguez used the dead end with the SBA to create a new path for herself and Nuestra.

She not only learned how to improve her credit but wanted to ensure others didn’t have to follow her journey as an entrepreneur.

Rodriguez extended the “Nuestra” brand to include financial advising. She started Nuestra Financial in April of 2020.

“Now I’m helping others. I’ve been able to restore my credit,” Rodriguez said. “I’ve been able to help others restore their credit and be able to help them make a business themselves if they so choose. I’ve been able to survive.”

Without grants and other funding, Rodriguez managed to keep her restaurant open through funds generated from Nuestra Financial.

“I was very quiet about it in the beginning. I didn’t want people to be like, ‘Oh look at this girl, she just opened a restaurant in the middle of a pandemic,’ and talk smack,” Rodriguez said. “About a month or two later, a light bulb hit and I was like, nobody pays my bills but me. I needed to mind my own business and not worry about what other people thought.”

In creating Nuestra Financial, Rodriguez said she’s helped Worcester residents restore their credit and purchase new vehicles and homes.

Rodriguez said financial literacy is rarely taught to children in school and wasn’t something she learned. When a situation arises like a rejection notice for an economic disaster loan, many don’t know how to respond or where to find answers.

Rodriguez said she’s helped young and old people, along with those who have bad credit or no credit.

“We lack the confidence, including myself, because we weren’t taught,” Rodriguez said. “So if you don’t know something, you weren’t taught, you’re not going to be confident about it.”

Coming out of the pandemic, Rodriguez remains confident about both her businesses. Nuestra, the restaurant, while closed for daily service continues to provide catering services. Rodriguez is still preparing what the future holds for the restaurant but plans to announce an update soon.

As masks start to become less a part of daily routines, Rodriguez, as a small business owner, doesn’t envision many differences from this year to last.

So many aspects of life remain uncertain from rising food costs to a potential third booster for vaccines and whether the country will ever reach herd immunity for COVID-19.

The pandemic arrived with Rodriguez immediately pivoting. As it approaches its potential end, Rodriguez will continue to do what helped her to navigate it.

“I feel like there is no new normal just yet,” Rodriguez said. “I think we’re all just trying to adjust and pivot at the same time and getting creative. I think it’s where we all are.”

Related Content:

Owner of Worcester’s Nuestra restaurant, closing due to COVID impact, has something she’d like to say to Gov. Baker

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Columbus Mattress Wholesale moves to newer, larger Gahanna store

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More than four years back, Cathryn Clark’s boyfriend, Christopher Robbins, was on the hunt for a new mattress. He just couldn’t find one at an affordable  price. 

Clark, 29, and Robbins, 34, who are now engaged, were living in Franklinton, where they still live today.

They had no experience owning or operating a small business; Robbins worked as a retail assistant for SAS Retail Services while Clark worked as the communications director for two Methodist churches. 

But in 2017, Robbins, with Clark at his side, took the leap and opened Columbus Mattress Wholesale on the West Side, with the goal of  helping low-income consumers secure mattresses and other bedtime products.  

“We really wanted to bring a store to people that, you know, they weren’t paying an arm and leg, but they still could get a good night’s sleep,” Clark said.

Customers at Columbus Mattress Wholesale can pay cash or credit, for example, but the business also works with financing companies that serve people without credit scores, with bad credit or who are lower income. 

Last month, the business made a big move. It expanded from its original location on Harrisburg Pike to a store double the size at 435 Agler Road in Gahanna.

Clark said she and Robbins saw a need in the broader area, with many of their customers coming from outside the Hilltop, such as Linden.

Nestled between Dollar Tree and the Ohio BMV in Gahanna, the new storefront opened Memorial Day weekend and sells mattresses, bed bases, bed frames and pillows. Mattress prices range from under $100 to more than $1,000, depending on the size and brand, which includes some well-known names such as Serta, Beautyrest and Casper.

Clark said while she and Robbins originally sold solely Ohio-based brands, they’ve branched out to national brands as business has grown.

Columbus Mattress Wholesale also offers free same-day delivery on most orders from customers living in Columbus. 

Clark does a little bit of everything for the business, from running communications, to working on the sales floor, to managing the sales team, to ordering what they sell. 

She said a big mission for herself and Robbins, beyond doing business, is aiding the community.

“We’ve seen a lot of people struggle,” Clark said.

Clark said she and Robbins work to mentor other people who are hoping to open or currently own a small business. She added that the store starts employees at $17 per hour.

She and Robbins haven’t decided yet what they will do with the original location — which is currently closed — but said they might shift it into an accessory store.

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@SarahEDon

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