Assigned Risk Auto Insurance: A Guide for Drivers with Bad Credit

By Randy Luton | Last Updated: 07/17/2023

A few violations could result in increased rates, but if you accumulate too many major convictions or citations, your insurer might decide not to work with you at all. If you possess a car but don’t have auto insurance your state requires, this creates serious issues. It may be difficult to find a firm willing to give you car insurance coverage if your driving record is full of infractions

Entering the state-assigned-risk pool may be the only option to obtain the coverage you require to legally operate a vehicle if your auto insurance application is rejected

Here’s a look at assigned-risk pools for auto insurance and how to decide whether to join one.

What is an assigned-risk car insurance pool?

Car owners must have a minimum amount of liability insurance in every state. However, the typical insurance market, often referred to as the voluntary market, has the right to reject coverage to drivers if it believes to have too many risk factors, such as a lack of expertise behind the wheel or poor driving history.

We know that not everyone can understand the complex terms in the auto insurance glossary. That is why we have tried to explain it in easy terms; States have developed assigned risk plans, which offer coverage through a pool of insurance firms, to address the insurance needs of drivers who have been declined by insurers. These schemes make it possible for automobile owners to obtain insurance, although assigned risk plans have far higher rates than voluntary market policies.

What problems put drivers in the assigned-risk pool?

For the assigned-risk pool, each state has its own qualifying requirements.

Typically, you can apply to your state’s assigned risk pool if you’ve recently tried to get vehicle insurance but were rejected. You might need to be rejected more than once in some states.

You could be refused auto insurance for the following reasons:

  • If you have a hit-and-run on your record
  • You have no driving experience
  • If you DUIs or DWIs
  • The area where you live and drive has a record of too many thefts and vandalism
  • Your driving record contains a number of accidents, violations, or claims.

How to get an assigned risk plan?

Here are some general steps to getting an assigned risk auto insurance plan, while the particular procedure may differ based on your location:

  • Contacting insurance companies: Make contact with local insurance providers and ask about their assigned risk policies. You might look for high-risk car insurance companies or unusual insurance plans.
  • Submit useful information: Be ready to submit pertinent information about your driving history, including any accidents, moving infractions, or license suspensions, when applying for an assigned risk auto insurance plan. Based on this data, insurance firms will determine your degree of risk
  • Fill out the application: Fill out the application for assigned risk auto insurance that the insurance provider provides. The application may ask for personal data, information about your car, and facts on your driving history.
  • Pay the Premium: Due to the higher risk involved, assigned-risk auto insurance policies sometimes have higher rates. The exact cost will vary depending on a number of variables, including your driving record, where you live, and the coverage choices you select.
  • Wait for Approval: The insurance provider will analyze your information and decide if you qualify for the allocated risk plan once you submit your application and payment of the premium.
  • Receive Insurance Coverage: Upon approval of your application, you will be sent a policy with the terms, conditions, and specifics of your assigned risk auto insurance.

What are coverage options for assigned-risk drivers?

Depending on the insurance provider and state laws, assigned-risk drivers may have access to a variety of coverage alternatives. The coverage possibilities provided by assigned-risk auto insurance plans are comparable to those of normal auto insurance policies, nevertheless. Here are a few popular types of insurance:

  1. Liability insurance
  2. Bodily Injury Coverage Insurance
  3. Uninsured/Underinsured Motorist Coverage
  4. Personal Injury Protection (PIP)
  5. Comprehensive Coverage
  6. Collision Coverage
  7. Towing and Labor Coverage

Frequently Asked Questions

What do assign risk pools offer drivers?

States utilize assigned-risk pools, that offer insurance coverage to almost any motorist at a significantly higher cost. Insurance providers consent to be a part of these pools and to insure any motorist that the state designates for them.

Who needs an assigned risk pool auto insurance?

A driver who is getting rejection by standard car insurance companies needs an assigned risk pool insurance.

rating star

We generated 12,100,000+ Quotes (...counting), Helping People to Save Money and Time.

Editorial Guidelines: The above is meant as general information to help you understand the different aspects of auto insurance. This information does not refer to any specific auto insurance policy. Coverages and other features vary between insurers, vary by state, and are not available in all states. References to costs of coverages/repair, average or typical premiums, amounts of losses, deductibles, etc., are indicative and may not apply to your situation. We encourage you to speak to our insurance representative and to read your policy contract to fully understand your coverages.

Was this article helpful?

Randy Luton is the Founder and CEO of RateForce. He is passionate about InsurTech services and has in-depth knowledge about the auto insurance sector of the USA.