Non-Standard Auto Insurance Coverage: What is it and Why Companies Are Selling it to You

The term “non-standard” auto insurance refers to a particular type of auto insurance designed to cover drivers who find it difficult or impossible to obtain coverage at affordable rates, if they can find it at all. Typically, applicants for this sort of insurance are considered to be high risk with a serious violation, such as a DUI on their record. Other drivers are considered high risk if they’ve had multiple accidents, bodily injury accidents or drive high risk cars such as sports cars and custom built cars. In other words, based on your driving underwriting experience, you may not be considered a favorable risk and many companies will find you ineligible or not charge you standard or preferred rates. Due to more stringent drunk driving laws and a more competitive insurance industry, non-standard insurance is becoming more common with many newer companies offering this coverage exclusively.

Some drivers, such as those who are newly licensed, or drive high value vehicles, may find the lowest rate from a non-standard insurance company as opposed to a traditional company. There’s a wide range of rates for non-standard insurance. You don’t necessarily need to be a high risk driver to obtain non-standard insurance either. If you’re driving record is good and you don’t have chargeable claims or violations, you’ll probably be able to stay in the standard, or voluntary, market. This means your premiums will be less expensive.

Another option that’s available in most states is obtaining an assigned risk policy. This sort of policy is designed to cover a poor risk that an insurance company is compelled to cover under state laws. Assigned risk insurance is often called “the insurance of last resort”. If you still have your license, and your state requires you to obtain insurance to drive, you should be able to find coverage with an assigned risk program, but it’s not cheap. You’ll pay for the exposure you present to the insurance company but you’ll have some coverage. Obtaining a policy through your states assigned risk, or residual, market may be the only solution to finding auto insurance.  Check with your state’s Motor Vehicle Department for rules that apply where you live.