What is a high-risk driver and what does it mean for insurance?

October 26th, 2017  |  Auto Insurance

Insurance companies, like any other business, wish to provide their customers with the best service they can, while also staying profitable. So, in the event of inevitable payouts, insurance companies charge those they consider to be high-risk more to compensate. To determine who is high-risk, insurance providers rate drivers on the likelihood that they will be involved in an at fault accident that will end up costing them a substantial amount of money in the event of a payout. The higher the chance of this happening, the bigger risk the driver poses to the insurer. To determine risk, drivers are rated on a number of factors.

What makes you a high-risk driver?

In the eyes of your insurance provider, you could be put in the high-risk driver category thanks to a number of factors, which leads your insurer to believe that you present a high likelihood of putting forth an at fault claim. Some of these factors include being a new driver, having at fault claims on your policy, and having multiple tickets or driving infractions. Violations such as impaired driving and other serious infractions can quickly label you as a high-risk driver.

Being considered high-risk can come down to a multitude of factors in addition to those mentioned above, including the type of car that you drive. Different vehicles hold different levels of risk in the eyes of your insurer, whether it is a vehicle with a higher theft rate, or a car with a lower safety rating, etc. Other than driving habits, prior infractions, or the type of car you are driving, your demographics can also play a big part in considering you high-risk. For example, unfortunately for you young guys out there, your demographic is considered more high-risk than others.

What happens to your insurance if you are considered high-risk?

Unfortunately, being a high-risk driver comes with some consequences when it comes to your insurance. At best your premium prices rise significantlyat the time of your renewal, at worst your insurer denies you coverage. The increased price of your premiums or your insurer’s decision to deny you coverage stems from the notion that they view you as a high-risk customer that is likely to put forth a costly claim. Charging you more or denying you altogether is their way of compensating for any impending loss on their end.

How to save money on insurance as a high-risk driver

Auto insurance prices in Ontario are high enough as it is, now, add being considered a high-risk driver on top of that and you are paying a hefty sum of money to keep yourself and your car on the road. Luckily there are some ways to keep costs manageable if you are in the high-risk category.

First thing to do is to shop around and find the best possible deal you can, as there are some insurance providers out there that cater specifically to those in hard-to-insure situations. Another way to cut down on premium costs is to drive a more insurance friendly car. As mentioned above certain cars hold a higher level of risk and can cause your premiums prices to rise. And probably most simply, become a safer driver. Yes, this takes time, but after a while staying clear of driving infractions or at fault claims will eventually cause your insurance to go down in price. To help you achieve this, you can retake a driving course, or even utilize smartphone apps that can track your driving habits and help keep you safe on the road (just be sure to stay hands-free and alert while driving).

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