Nonstandard auto insurance is an insurance policy offered to cover high-risk drivers if they do not qualify for standard car insurance from normal or traditional auto insurers.
As a driver, if you have a bad driving record due to accidents, speeding, or driving under the influence, or if you have lapsed in coverage or pose another risk to the insurer, you need to go for the nonstandard auto insurance policy.
Even if you have a standard policy currently, your insurer may have limits on how many claims they will cover or how many violations you can receive. If you surpass this limit, the carrier may cancel your policy. And you may have opted for a nonstandard car insurance policy.
How Does it Work?
The car insurance industry categories drivers into three different classes.
- The preferred drivers are referred to as the least risky drivers.
- The standard drivers are referred to as the average drivers, who carry an average amount of risk.
- Nonstandard drivers are referred to as high-risk drivers and may not get coverage under a standard car insurance policy.
Just like I have mentioned above, high-risk drivers include those with bad driving records, suspended or revoked licenses, gaps in insurance, or poor credit. Keep in mind that teenagers and seniors can also fall into this category.
Nonstandard auto insurance coverage is very similar to standard policies but at higher premiums because of the increased risk to the provider.
These policies always come with higher deductibles to keep monthly costs more manageable. However, higher deductibles mean you’ll pay more out of pocket if you get into an accident and file for a claim.
High-risk drivers have fewer options for nonstandard insurance, as not all traditional insurers offer it. However, there are specialized insurers that focus on providing coverage for these drivers.
Who Does Nonstandard Insurance Not Cover?
Even though this type of policy is for high-risk drivers, there are still some drivers with very bad driving records that may be uninsurable. These classes of drivers may turn to the residual market provided by the state department of insurance to apply for car coverage. This is the last resort when a driver can buy a car from a private insurer.
Who Needs Nonstandard Car Insurance?
You may need this type of policy if you have a poor credit history, are required to file for an SR-22, or have a suspended driver’s license. You can also go for it if you have a lapse in car insurance coverage or if you have a history of moving violations, driving under the influence, or accidents.
What Are the Benefits of Nonstandard Auto Insurance?
The main benefit of this type of insurance is that it provides the ability for high-risk drivers to drive legally on the road. It covers high-risk drivers until they are considered standard drivers. Most traditional insurers look at your claims history and driving records for the past 3–5 years.
So the main point is to not get any more DIUs, speeding tickets, or have any other accidents until your records get clean. Also, if you pay for your monthly nonstandard car premiums on time, you may be able to avoid a lapse in coverage and improve your credit score.
Standard vs. Nonstandard Auto Insurance
Nonstandard and standard auto insurance mainly differ when it comes to cost. Standard auto insurance is for low-risk drivers with clean records and good credit, so this results in lower rates. However, nonstandard insurance, on the other hand, is for high-risk drivers, such as those with past accidents or violations. This results in higher premiums for similar coverage.
How Much Does it Cost?
This type of insurance is more expensive than what you were paying when you were considered a preferred or standard driver. The cost of your premiums will depend on factors like your driving record, amount of coverage, age, zip code, and car type.
If you want a high-limit, low-deductible policy, then your premium will be very high. While a high-deductible policy will be very cheap, you will want to make sure that you have enough savings to cover your deductible in case you get into another accident.
Which Company Sells Nonstandard Auto Insurance
Top car insurers for high-risk drivers provide good rates compared to SR-22 insurance and competitors. Below are the best insurers selling this type of insurance:
- Acceptance Insurance
- Bristol West (part of Farmers)
- Dairyland
- Geico
- The General
- Kemper
- Mercury
- National General (recently acquired by Allstate)
- Progressive
- Safe Auto
- Direct auto insurance
- Gainsco (recently acquired by State Farm)
- Alfa Insurance
Just like I have stated above, high-risk drivers have fewer options for nonstandard insurance, as not all traditional insurers offer it. The above-listed are the best insurers who sell the policy.
How to Purchase Nonstandard Auto Insurance
To get this type of car policy, you can just follow the same steps as you would for a regular policy. However, always keep in mind that some traditional car insurers won’t insure high-risk drivers because they do not provide these types of policies to begin with.
Therefore, you can get quotes for the non-standard insurers listed in this article. You can also meet with a local insurance agent for recommendations and guidance.
