Standard vs. Non-Standard Car Insurance

The average rates for standard car insurance in the US are $79.58/mo. Non-standard car insurance has rates $92.17/mo higher on average.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • There are standard and non-standard auto insurance policies
  • High-risk drivers are placed in the non-standard category, whereas low-risk drivers qualify for standard coverage
  • Do not lie on your insurance application, or you’ll be committing insurance fraud
  • Another big difference between standard and non-standard auto policies is price
  • Assigned risk is a second insurance plan option for high-risk drivers
  • To get out of a non-standard policy, focus on good driving habits

When it comes to auto insurance coverage, there is standard and also non-standard coverage. Each type has to do with the level of risk each driver represents. When you apply for auto insurance, you will be determined as a certain risk to the insurance company.

Those who are higher risk will be placed in the non-standard category.

Car insurance is necessary for most drivers, so it is an expense that almost everyone has to pay. How much it costs, however, can vary greatly. Those in the lowest risk category will pay the least, while those considered high risk will pay much more.

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Qualifying for Standard Car Insurance

Standard auto insurance coverage is considered to be the norm. The majority of drivers, as long as their risk level is fairly low, will qualify for standard coverage. Any driver who is looking to get car insurance will have to fill out certain information to determine which category they fall into.

Although you may be tempted to fudge a little on your application to qualify for lower rates, do not do this. Lying in any way on your insurance application is considered insurance fraud.

Even lying about where you have registered your car is considered fraud, according to the Coalition Against Insurance Fraud.

Lying to stay in the Standard category will not help either, especially since insurance providers check your driving and criminal record.

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Qualifying for Non-Standard Car Insurance

If you are a driver who is considered high-risk, you will be placed in the non-standard category. Drivers who qualify for non-standard policies are those who have had multiple accidents. It is also for those who have committed major traffic violations such as DUIs, license suspensions, or reckless driving.

Some companies will place a driver in the non-standard category if they are currently uninsured or have had coverage gaps in the past. In those instances, they will need to have non-standard insurance for a certain amount of time.

Standard Car Insurance Companies

The companies that provide standard auto insurance coverage are the major ones that you have probably heard of. Some of these insurance companies strictly insure standard drivers, while others have a separate department for non-standard individuals.

If you feel like you are one of the drivers of normal to low risk – your record is free of accidents, you haven’t filed insurance claims for years, and you don’t have many tickets for minor traffic violations – there are many ways to find a provider for standard insurance.

You can do a quick Internet search, which will give you a fairly good idea of how much you will probably spend on car insurance. Because there are several insurance providers, it is possible to find a pretty good rate if you have had a good driving record.

Always do additional research into the companies that you are considering.

If you are having difficulty choosing a car insurance provider, check with J.D. Power and Associates. They will give you an idea of which companies rank the highest in certain categories, according to other drivers just like you.

Non-Standard Car Insurance Companies

If you have tried to find an auto insurance policy and have been turned down by multiple companies, you may need to turn to non-standard companies. These companies — whether they are affiliated with standard companies or are completely separate — will be able to offer you a policy, even if you have been unable to get one elsewhere.

You can use the Internet to find non-standard policies as well. Just do a general search for them, and you will be presented with a number of options.

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Rates for Standard vs. Non-Standard Policies

A big difference between standard and non-standard auto policies is price. Because insurance companies’ quote rates are based on risk, the higher the insurance risk, the higher the premium.

The National Highway Traffic Safety Administration states that drivers in their teens get into crashes about three times as much as all other drivers.

This fact automatically puts them into the high-risk category, even if, individually, they have a clean record. Even within standard insurance policies, there is a large range of premiums available.

There can also be a large difference between drivers of the same age. Females usually pay less than males, certain vehicles cost less to insure, and the driving histories may be different. Thus, even if you are put into the standard auto insurance category, you may still end up paying high insurance premiums.

Drivers cannot drive without insurance in most states. If you are unable to get standard insurance, you don’t have much of a choice but to get a non-standard policy. This lack of choice, along with your high-risk status, causes non-standard rates for insurance to be very high.

If you need to get non-standard coverage, it should be your goal to do anything in your power to get out of that category as soon as possible.

Some insurance companies will require you to stay with a non-standard company for a certain period of time before you can apply again for standard insurance.

This period may last anywhere from six months to a year. In order to keep rates lower, some drivers will only choose the minimum coverage required in their state until they are able to get a standard policy.

Non-Standard vs. Assigned Risk Car Insurance

Non-standard insurance is not the only option available for high-risk drivers. Assigned risk is another high-risk insurance plan that is sponsored by the state. Non-standard and assigned risks are not the same. In fact, assigned risk policies should usually be your last option.

Non-standard insurance for drivers is similar to a standard policy, except that you are charged rates that correlate with your high risk. Most non-standard providers will still allow you to get any type of coverage you want, such as medical, comprehensive, and collision.

Assigned risk policies are usually more defined and less flexible. Assigned risk insurance typically only includes liability insurance, which is the minimum insurance that each state mandates that every driver has. If you choose to go with assigned risk, you will probably not have the option for additional insurance coverage.

The benefit of assigned risk is that you can’t be turned down. The state will assign you to a particular insurance company who has to insure you with basic coverage. According to the expert advice from the Insurance Information Institute, the insurance provider will either absorb the loss or keep the profit.

Assigned risk policies are usually just as expensive as – if not more than – non-standard policies, costing about twice as much as standard coverage policies.

Lowering Non-Standard Car Insurance Rates

It is impossible to escape high rates when you are placed in the non-standard risk category. However, there is stuff you may do to lower the rates that you pay. One is to follow the lead of assigned risk policies and only purchase liability coverage until you are back in the standard insurance category.

If you choose to keep fuller coverage, you may opt to increase the deductibles on both your collision and comprehensive coverage. Also, don’t buy any unnecessary coverage, such as roadside assistance, if you already have AAA, or medical coverage if you have good health insurance coverage.

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How to Get Out of Non-Standard Car Insurance

Because of the high cost of high-risk insurance, you should do whatever you can to lower your insurance risk. After a period of time, you can reapply for standard insurance and hopefully qualify.

Different factors, such as driving a safer car, may help to lower your risk in the event you have driven a high-performance car in the past. If you live in a high-theft neighborhood, store your car in a locked garage or in another area, or spend the money on devices for anti-theft and tracking devices.

One of the biggest things you can do is focus on good driving habits. If your driving history is full of accidents and tickets, you will benefit from not getting any more. Most accidents and traffic violations will stay on your driving record for only three years. After this time period is over, most drivers can start fresh.

With serious violations such as driving under the influence, your record will contain this for a longer period of time.

A DUI stays on your record for a seven-year period in some states, while in others, it is for a lifetime.

Drivers who have no driving record, such as teenagers just starting out, also don’t usually have a credit history, which can negatively affect your ability to get cheap car insurance. Work on improving your credit score by getting a credit card if you don’t have one yet, and fully pay off all bills on time.

Because there are options such as non-standard and assigned risk insurance, high-risk drivers can rest assured that they will be able to get some type of coverage somewhere. Do your research to find out what is best for you, and then do your best to get back into the standard market as soon as possible.

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