Why Are Assigned Risk Auto Insurance Policies So Expensive?


Blue man holding up blocks that spell 'risk'Assigned risk auto insurance policies are designed to provide vehicle protection for higher risk drivers who have been repeatedly denied coverage in the voluntary market. These policies are more expensive because the drivers who purchase them are considered to have an increased potential of filing a claim and are not viewed as profitable risks by insurers. When participating in these programs, motorists are assigned an insurer and, consequently, are not given the opportunity to shop around for the most affordable option.

The majority of motorists in the United States are required to purchase a minimum amount of coverage to legally drive. And to help decrease the number of uninsured motorists on the road, many states have adopted assigned risk plans to provide options for residents who are unable to find adequate coverage on the voluntary market. For example, higher risk drivers who need Massachusetts auto insurance can utilize the MA Auto Insurance Program to meet state requirements. In states that offer these services, all licensed coverage providers are required to share the responsibility of insuring higher risk drivers.

Many of the states that offer these programs have the same basic eligibility requirements. The motorists in question must have a valid driver’s license, they must be a legal resident of the state, their automobile must be legally registered within the state, and in some cases they must have been denied coverage on multiple occasions.
Red letters spelling 'risk'
Vehicle owners usually can leave an assigned risk plan at any time if they find a more affordable option. To re-enter the voluntary market, motorists should periodically shop around and compare their options. If high-risk drivers maintain a clean driving record for an extended period of time, they may become eligible for a lower priced policy. One of the best ways for drivers to efficiently shop around is to compare auto insurance quotes without personal info by using online resources.

Helpful online tools allow vehicle owners to evaluate dozens of estimates from a single website in minutes, and drivers can utilize these resources at no cost. This usually means that while motorists are taking advantage of an assigned risk plan, they can continue to search for potentially cheaper insurance on the voluntary market.