Assigned risk auto insurance is state-sponsored coverage for high-risk drivers who can’t secure insurance coverage elsewhere. It usually comes with more expensive premiums.
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Bylines include Forbes, Bankrate, and CBS News
Aly is a reporter specializing in real estate, mortgages, and personal finance. You can find her work in Hearst newspapers and numerous financial publications.
3+ years producing insurance and personal finance content
Main architect of the Insurify Quality Score
Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.
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Assigned risk auto insurance is an option for drivers who have trouble securing a standard car insurance policy, often due to a poor driving record, a low credit score, or because they live in an area at high risk of theft or vandalism.[1]
States establish assigned risk auto insurance programs and require private insurers to participate. Drivers get coverage by applying to their state’s risk pool, and the state assigns them an insurer. While insurers can’t deny eligible drivers coverage through this program, assigned risk car insurance policies aren’t cheap.[2]
Here’s what you need to know about assigned risk insurance, and why it’s important to compare rates from multiple companies before applying for assigned risk coverage.
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*Quotes generated for Insurify users within the last 10 days. Last updated on April 25, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from April 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on April 25, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from April 25, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
What is an assigned risk auto insurance pool?
An assigned risk auto insurance pool is a state-supervised insurance market for high-risk drivers who can’t secure private-market car insurance. These are also called shared insurance markets, as they spread the risk of these higher-risk drivers among various insurance companies in the state.
Drivers can apply for their state’s assigned risk pool, and the state will assign them to an insurance company that must provide them coverage.
Pros and cons of assigned risk car insurance
Pros
Guaranteed coverage: Assigned risk insurance guarantees all drivers can get state-minimum coverage — regardless of their driving record, credit score, driving history, or other factors.
Helps drivers comply with law: Most state laws require car insurance, and drivers who don’t have coverage can face fines or criminal charges.
Provides legal protection: Beyond ensuring drivers comply with the law, liability coverage also helps protect you if another driver sues you for damages or injuries.
Cons
More expensive rates: Because assigned risk insurance is for higher-risk drivers, premiums are more expensive on these policies than on traditional car insurance.[1]
No choice in insurer: The state assigns drivers participating insurers within the pool, so drivers can’t comparison shop for insurance.
Limited coverage: Assigned risk pools typically only offer the minimum coverage the state requires. Drivers may not have access to additional coverages for more protection.
How assigned risk car insurance works
To get assigned risk car insurance, find your state’s assigned risk insurance pool. For example, in Ohio, it’s the Ohio Automobile Insurance Plan (OAIP). High-risk drivers in New York can use the New York Automobile Insurance Plan (NYAIP) for coverage.
You’ll then apply for your state’s pool using an official application. You can often do this online or by contacting a certified insurance broker or agent within your state.
Once the state approves you for the assigned risk pool, it’ll match you with an insurance company. The insurer assesses your driving record, credit score, location, vehicle, and other factors to determine your policy’s rate. Your coverage amounts and any driving convictions will affect your costs. For example, Texas assigned risk plans require a 60% additional charge if you have a driving under the influence (DUI) conviction.[3]
Who qualifies for assigned risk auto insurance?
Assigned risk car insurance eligibility requirements vary by state. In some states, you may need to certify that you’ve applied for and been denied private market car insurance in a certain period. In others, you just may need to be a resident of the state, have your car registered there, and hold a valid state driver’s license.
You also must be up to date on your recent car insurance premiums. For example, in North Dakota, you’re ineligible if you have any late premiums in the past year.
Assigned risk insurance is for high-risk drivers, though this doesn’t mean only drivers with incidents on their driving records. Insurance companies may deny you traditional coverage for many reasons, including:[1]
Having no or a bad driving record: Inexperienced drivers, particularly teenagers, may find it difficult to get traditional car insurance coverage, as they’re at a higher risk of potential accidents. Plus, having speeding tickets, at-fault accidents, moving violations, DUI convictions, and more on your record can make you a high-risk driver for insurers.
Lapses in coverage and payment: If you’ve regularly let your insurance coverage lapse or forgotten to pay your premiums, this also makes you a higher risk to insure.
Bad credit scores: Depending on your state, insurance companies may be able to use your credit score to indicate your risk as a policyholder. Insurance companies believe drivers with poor credit are more likely to file a claim.[4]
Living in a risky location: Some areas have higher chances of theft, vandalism, or accidents. If you live in a high-risk area, you may have trouble securing traditional coverage.
Driving a unique or special car: Driving a custom, high-performance, unique, or classic vehicle could put you at higher risk for theft — and make you a higher risk for insurers.
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Assigned risk vs. standard auto insurance
While assigned risk insurance plans ensure drivers can secure the minimum required coverage for their state, they’re not the same as standard car insurance policies. Here’s how these policies differ.
Factor
Assigned Risk Insurance
Standard Insurance
Monthly premiums
More expensive than standard policies
Typically cheaper than assigned risk
Insurance company
The state assigns insurers to drivers
Drivers can shop around
Coverages
Coverage usually limited to state-mandated minimums
Drivers have more coverage options
Eligibility
High-risk drivers are typically eligible
High-risk drivers may have trouble getting coverage
How to leave the assigned risk pool
Leaving the high-risk pool depends on why you’re a high-risk driver in the first place. If you have a traffic violation or accident on your record, you may need to wait until the incident falls off your record to qualify for a traditional car insurance policy.
You can work on leaving the assigned risk pool by:
Cleaning up your driving record: In some states, you can take defensive driving courses to dismiss violations or citations. This could help you more easily secure insurance coverage.
Improving your credit score: A better credit score may make it easier to get coverage, too. Paying your bills and debts on time, disputing errors on your credit report, and reducing your debts can help boost your score.
Driving a safer car: If you’re buying a car, consider one with high safety ratings, low theft rates, and anti-theft features. The less likely you are to file a claim, the lower your risk to insurers.
You can also simply wait it out. As you establish a record of driving safely and pay your insurance premiums on time, you become a lower risk to insurers. Some state plans require insurers to provide coverage for an extended period while you work to improve your insurance and driving records. In New York, insurers must cover you for at least three years before they can choose not to renew your policy.
Assigned risk auto insurance can be confusing, but it’s necessary for high-risk drivers who can’t buy coverage elsewhere. If you need more information regarding assigned risk insurance, see the answers to frequently asked questions below.
What is an assigned risk car insurance plan?
An assigned risk car insurance plan is a state-supervised insurance plan. Statewide insurers must participate in the plan and provide coverage to any eligible driver the state assigns to them. These plans typically come with much higher rates than traditional car insurance policies
What does “high risk” mean in auto insurance?
“High risk” means a driver is more likely to file a claim. High-risk drivers are usually drivers with poor driving records, low credit scores, little driving experience, or a history of not paying previous car insurance premiums.
Who writes assigned risk car insurance policies?
Private insurance companies write assigned risk car insurance policies. The state requires companies to participate in the assigned risk market and assigns these insurers to eligible drivers.
Aly J. Yale is a freelance writer and reporter covering real estate, mortgages, and personal finance. Her work has been published in Forbes, Business Insider, Money, CBS News, US News & World Report, and The Miami Herald. She has a bachelor’s degree in radio-TV-film and news-editorial journalism from the Bob Schieffer College of Communication at TCU and is a member of the National Association of Real Estate Editors.
3+ years producing insurance and personal finance content
Main architect of the Insurify Quality Score
Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.
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