What’s Assigned Risk Auto Insurance?

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.

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

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.

Factors that make a driver “high risk”

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.

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.

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 FAQs