Everyone needs auto insurance to legally drive in the US, but insurance rates can be expensive, especially if you have a less-than-stellar driving record. Luckily, non-standard auto insurance is an alternative that can save you money. If you would like to learn more, check out these four reasons you may want to consider a non-standard auto insurance policy.
1. You’re A High-Risk Driver
Insurance companies prefer to minimize risk by insuring low-risk drivers. Low-risk drivers are people who have driven for a while and follow the rules of the road. For this reason, insurance companies assume low-risk drivers are less likely to get into or cause an accident than high-risk drivers.
Of course, that doesn’t mean an insurance company won’t insure a high-risk driver, but the high-risk driver will have a high premium. Therefore, many high-risk drivers do well with a non-standard insurance policy because they tend to have better rates.
You may be considered a high-risk driver if you have a DUI, a recent accident, or recent speeding tickets/citations. However, in some cases, you can’t help being high-risk. For example, anyone who has just gotten their license is usually considered high-risk because they have less experience with defensive driving and driving in general.
2. You Lack a US Driving Record
Even if you’ve driven for years, a foreign driver’s license can pose a problem. If you’re visiting the US for an extended time, you may want to be able to drive yourself. To do so, you will need an international driving permit (IDP).
After obtaining your IDP, you still need to buy auto insurance, which can become expensive if you have a foreign license because the insurance carrier won’t be able to verify your driving history. Therefore, non-standard auto insurance may be the best choice.
If you extend your stay in the US, you can easily turn your IDP and foreign license into a US license without the need for a driving test. Once you have a US license, premiums for standard auto insurance lower.
3. You’ve Had a Lapse in Coverage
If you let your insurance policy lapse, you risk many consequences. If you are still paying off the car, the lender may repossess the vehicle after a lapse of coverage. You’ll also likely get a fine from your state’s Department of Motor Vehicles, and they may even suspend your license. When you do try to get another policy, expect potential higher rates.
Naturally, these risks make it important to get coverage again as soon as possible, but starting a new policy is expensive, making non-standard insurance policies a great choice after a lapse in coverage. As long as you spend a few years covered and following all the rules of the road, your rates should start to lower again.
4. You Have Bad Credit
Credit history is often a deciding factor in many things these days. Lenders and insurance companies use your credit history to determine if you are a high risk. However, they do this differently. While lenders consider whether or not you’ll be able to repay the loan, insurance carriers use your credit history to determine how likely you are to file a claim.
Depending on where you live, the rates for bad credit could be significantly more. For example, in Michigan, an average rate for auto insurance is about $2,368, but a rate for someone with poor credit is $6,316. In Illinois, the difference is smaller, but you’ll still pay 87 percent more for auto insurance if you have bad credit. Therefore, if you have bad credit, a non-standard policy may be the more financially responsible decision.
Even if you have a bad driving history or poor credit, with non-standard auto insurance, you can find affordable coverage. If you would like to learn more about non-standard auto insurance or if you’re ready to get a quote on a policy, contact us at Metropolitan Insurance Service Consultants, Inc.