Cost Factors for Nonstandard Auto Insurance

Having adequate financial protection while owning or operating a motor vehicle is an essential loss control measure. However, certain circumstances, such as a history of accidents or poor credit history, could make acquiring and maintaining coverage more difficult. Those seeking insurance may need to look beyond preferred and standard auto insurance policies, including exploring nonstandard auto insurance options.

What Is Nonstandard Auto Insurance?

Nonstandard auto insurance is typically carried by drivers who are unable to acquire coverage at a preferred or standard rate due to being seen as particularly risky to insure. Insurance companies may make this determination based on several factors, including claims history, age, vehicle details, driving experience and credit history. While standard auto insurance typically includes average prices and preferred customers may enjoy lower-than-average rates, nonstandard auto policyholders should generally expect to pay higher premiums due to their perceived higher risk levels.

How Are Nonstandard Auto Insurance Rates Determined?

Although nonstandard auto insurance rates are typically higher than the prices paid for standard and preferred coverage, the criteria that insurance companies consider when generating quotes may be similar. When assessing a person’s needs and quoting them a rate for appropriate coverage, the following factors may be analyzed:

• Location—Living in areas with higher accident rates or a greater probability of vehicle theft may cause insurance costs to increase.
• Driving record—Drivers with a history of infractions, such as speeding or driving while intoxicated, may need to pay more for coverage.
• Age—A policyholder’s age may also influence their premiums. For example, young drivers and elderly drivers may both be considered more risky and, therefore, may be quoted higher rates.
• Gender—In some cases, a driver’s gender may affect how insurers perceive their risk levels. For example, research has shown that women are generally less likely to be involved in accidents than men.
• Claims history—Motorists who have made several claims against their auto insurance in a short span of time may be considered significantly risky to insure and, therefore, may be quoted higher costs.

Vehicle owners and operators should also be aware that the details of all insureds, including spouses and dependents, listed on a nonstandard auto policy may be considered when determining rates. As such, even if the head of a household is not seen as particularly risky, incidents or other circumstances involving other parties could lead to higher costs.

How to Reduce Auto Insurance Rates

The easiest way to reduce nonstandard auto insurance costs is by reducing perceived risk levels and qualifying for standard or preferred coverage. To achieve this, motorists should work with a qualified insurance professional to identify what factors may be causing them to need nonstandard coverage and work to reduce associated risk levels.

Get the Right Coverage

At the Insurance Solutions Center, our team is dedicated to helping motorists, families and individuals in the Batesville, Greenville, Grenada and Oxford areas assess their circumstances and acquire appropriate coverage. We will work with you to analyze your insurance needs, identify available options and assemble an ideal policy. Visit our website or call 662-712-6405 for a personalized quote or to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.