This type of insurance is the most affordable, but it also complies with all state regulations. To reduce premiums, all optional coverage such as Rental Reimbursement or Roadside Assistance is not included.
Standard and Nonstandard Insurance Market
There are two types of insurance markets: standard and non-standard. For drivers who have not received any traffic tickets, the first type of auto insurance is for them. This market is considered low-risk by insurance companies. Drivers who have a history of major traffic violations, such as DUI or speeding, are considered non-standard. These drivers may have difficulty obtaining auto insurance on the standard market because of strict approval requirements from providers.
The following are reasons why standard market insurers may not offer policies:
* High-risk drivers are more likely to commit traffic violations in the same way.
* In some cases, the insurer may have to pay substantial compensation for repeat violations
* Drivers who are high-risk get their policy cancelled by the previous company due to frequent late payments
High-risk drivers and non-standard market customers must pay more for policies but they can get approval quickly. All applicants, regardless of their driving record or involvement in an accident, should purchase auto insurance policies to ensure they are able to get back on the roads.
Minimum Auto Insurance
To drive legally, every driver must only have the minimum coverage required by the state. The coverage limits vary by state, but the minimum coverage required in most states is the following:
Bodily Injury Liability: coverage that pays out or compensates for injuries sustained in an accident where the policyholder was at fault. This is the payout for an injured party.
* Property damage liability: Similar to Bodily Injury but for another person whose property or car is damaged in an accident, the payout covers damages. Repairs or replacements must be covered by the at-fault party.
Personal Injury Protection may also be mandatory in some states. This is applicable in states with no-fault regulations.
Collision coverage provides financial protection for the policyholder’s vehicle in the event of damage from an accident. This coverage provides financial assistance to repair or replace damaged parts.
Comprehensive serves the same purpose but only applies to damages that are not caused by an accident, such as falling objects, flooding, theft, or hitting animals. Leasing or financing companies may require both types of optional coverage.
After completing mandatory courses such as Defensive Driving and Driver’s Education Course, high-risk drivers may revoke their high risk status. Driving without insurance is illegal. Although insurance from the non-standard market may be more expensive, the company offers flexible payment options such as these:
* Economy plan: payment system that allows policyholders to pay the downpayment to purchase a policy. The remaining amount is paid by installments every 30 days.
* Quarterly plan: Another installment plan that policyholders have the option to spread out and pay once every four month for a year.
* An Annual Plan: This is the simplest method of payment, with a one-time payment upfront for a year policy.
No matter what payment plan is used, the rates will remain the same for the entire policy period. The insurance company guarantees the rate for a full year.
Although many people associate the phrase high risk with repeat violations or major infractions, most insurance companies have different opinions. Other than bad driving records, there are other factors that can help determine if someone is high-risk.
* The new age or teens who drive are considered high-risk because they have little driving experience. High-risk seniors (70 and older) also have hearing/vision problems. These people can get auto insurance quickly and easily through the company.
* Address Living in an area with a high crime rate makes it high-risk to be a driver. These cars are often the victims of vandalism and theft.
Credit history: The company doesn’t use drivers credit history to determine their approval.
Insurers use more variables than these three factors to determine whether an applicant is worthy of approval or cancellation. To begin underwriting auto insurance policies, the company needs only basic personal information.
Multiple discounts are offered by the company to help policyholders save on their insurance. Three types of discounts are available:
Driver Discounts: eligibility criteria include taking Driver’s Education or Defensive Driving Course. Students with high grades can also be eligible for the discount.
Policy Discounts: lower premiums for policyholders who have multiple vehicles registered under the same policy. Premiums are 31% lower for those who pay full.
Vehicle Discounts: Installing safety devices such as passive restraint and airbag, as well as cell-phone blocking and anti-theft systems grants you more discounts.