3 Reasons You Might Need High-Risk Auto Insurance

If you want to drive a vehicle on public roadways, you must maintain insurance on that vehicle. Most people have no problems obtaining an auto insurance policy, but there are some drivers that insurance companies label as high-risk.

A high-risk driver will need specialized auto insurance that protects the insurance carrier against the higher level of risk associated with covering these drivers.

Here are three reasons why your auto insurance company may require that you obtain a high-risk policy.

1. Multiple Speeding Tickets

Speeding tickets result in points being added to your driving record. Each additional point that you incur represents an increased level of risk for any insurance carrier willing to provide you with auto insurance coverage.

Each individual insurance company sets its own limit on the number of points a driver can have before being considered high-risk.

Some states allow you to participate in a defensive driving class in exchange for the removal of points from your driving record.

If you have multiple speeding tickets, it can be beneficial to complete the defensive driving course before you shop for a new insurance policy so that you don't have to pay for high-risk coverage.

2. Coverage Lapses

An insurance carrier will evaluate your past auto insurance coverages when creating a policy for you. Any lapses in insurance coverage present in your background can be cause for concern.

Driving without insurance is a serious violation that can have devastating consequences. Insurance providers will often assume that you continued driving during periods without insurance coverage, and this places you in the high-risk category.

The best way to avoid needing a high-risk auto insurance policy is to ensure you obtain new auto insurance before canceling your existing policy.

3. Poor Credit

It's becoming more common for insurance companies to run a person's credit as part of the underwriting process. Your credit history helps an insurance provider determine how reliable you are when it comes to paying your bills.

Poor credit typically means that a person has missed payments or been late making payments on multiple occasions. Since most insurance premiums are paid in monthly installments, insurance companies may worry that a person with bad credit won't make timely payments.

To avoid needing a high-risk auto insurance policy because of your credit rating, work to raise your credit score by paying down your debt and disputing any false information contained in your credit reports.

For more information on auto insurance, go to a website like http://www.denverautoinsurancecompany.com.