Being told you need non-standard auto insurance may feel discouraging, but don’t let it get you down. Although non-standard drivers typically pay more for car insurance than standard drivers, your rates can eventually normalize. Until then, here’s what you need to know about getting the best possible deal on non-standard auto insurance.
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Non-standard vs. standard auto insurance
For auto insurance, non-standard drivers are those who are generally seen as being more likely to get into an accident than a typical, or standard, driver.
Accidents cost insurance companies money, in the form of claims payments. Insurance companies pass these costs along in the form of higher rates for riskier drivers.
Of the three most common risk groups, non-standard drivers pay the most, while preferred drivers pay the least.
| Rate tier | Characteristics |
|---|---|
| Preferred (lowest rates) | An extended history of incident-free driving and timely insurance payments |
| Standard (average rates) | A driving record with a minor blemish or two, or, in many states, average credit |
| Non-standard (highest rates) | Tarnished driving record, insurance lapses, bad credit and/or unconventional vehicles. |
If you don’t qualify for non-standard car insurance, you typically need to purchase insurance through your state’s assigned-risk program in what’s known as the residual market.
The specific factors that determine whether you qualify for standard or preferred coverage vary by company.
Since each auto insurance company uses a different formula to determine your rate, it’s best to compare quotes from multiple companies whether you are a non-standard, standard or preferred customer.
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How does non-standard car insurance work?
Most non-standard auto insurance companies offer the same coverages as standard auto insurers, but they tend to customize their products for those who don’t qualify for standard rates.
Since non-standard rates are generally higher than standard rates, non-standard insurers focus on providing bare-bones coverage at the lowest possible prices.
In most cases, this includes liability coverage up to the minimum limits required by your state. If your state requires uninsured motorist coverage and/or personal injury protection, a non-standard policy will include these coverages, too.
You can typically add collision coverage and comprehensive coverage, which are required for car loans, to a non-standard policy, as well as most of the other optional coverages that standard insurance companies offer. You can also choose policy limits that exceed your state’s minimum requirements.
Non-standard companies may adjust certain policy features to make them more affordable. For example, a few non-standard companies limit their towing coverage to $75, which is considerably less than the amount of towing coverage most standard policies offer.
If you are a non-standard driver with an SR-22 or FR-44 filing requirement, a non-standard company may submit the form to your state’s motor vehicles bureau at no extra charge. Standard insurance companies often add a filing fee to your rate for this service.
Which drivers need non-standard auto insurance?
Drivers with major and/or multiple accidents or violations, such as a DUI or reckless driving, are the most-common candidates for non-standard auto insurance. However, there are several other reasons why you may not qualify for standard insurance.
- Too many insurance claims: A standard insurance company may decline to renew your policy if you file too many claims within a few years. Standard companies also often reject applicants with too many recent claims.
- Missed insurance payments: If you’ve had past car insurance cancellations for missed payments, standard insurance companies may see you as a risk not worth taking.
- New drivers: Insurance companies tend to fear the unknown, such a driver with no records to check for prior accidents, tickets or claims. This can include teens as well as those who have moved to the U.S. from another country.
- Coverage gaps: Customers who don’t currently have coverage or have had a lengthy lapse face the same car insurance challenges as new drivers. This includes those who have lived abroad or without a car for an extended period.
- Bad credit: In an insurance company’s eyes, your credit history indicates how risky you may be to insure. Some companies reject customers with bad credit, although several states have limits or bans on credit scoring for insurance.
- Exotic or high-performance cars: Many insurance companies see ultra-high performance cars as a costly repair bill waiting to happen, particularly if the car has rare high-end parts. In this situation, you may have to find an insurance company that specializes in exotic vehicles.
- Rebuilt cars: Most states require rebuilt cars to pass a safety inspection before they can legally be driven on public roads. Still, many insurance companies consider them too risky to insure.
In most of these situations, a non-standard auto insurance policy will put you on the path to qualifying for standard insurance, provided you maintain a clean driving record and pay your insurance bills on time.
Granted, if you have multiple tickets or accidents on your record, you may have to wait at least three years before prior incidents start coming off your record.
However, if you only need to establish or reestablish a favorable insurance history, you may start qualifying for standard rates after an incident-free six-month policy term or two.
Which companies sell non-standard car insurance?
Non-standard car insurance is widely available in most regions across the U.S. from companies that specialize in it and those that also sell standard insurance.
Some non-standard auto insurance companies are owned by or affiliated with well-known standard insurance companies. For example, The General is affiliated with American Family, while Safe Auto is a subsidiary of Allstate.
Companies offering non-standard insurance include:
- Allstate
- Bristol West
- Dairyland
- Direct Auto
- Gainsco
- GEICO
- The General
- Progressive
- Safe Auto
- State Farm
How can I buy non-standard auto insurance?
You can buy non-standard auto insurance online, by phone or in person with an agent, and each shopping channel has its pros and cons.
Some companies, such as The General, offer a fully online shopping process that allows you to obtain quotes, submit your payments and initiate your policy within minutes. Other non-standard companies allow you to request a quote online but require you to complete the process over the phone with an agent.
If you’re not sure if you need non-standard insurance, it’s often best to begin by requesting a quote from a standard insurance company. Many have a non-standard insurance partner as a backup for customers who don’t qualify for standard coverage.
It’s also important to understand the differences between captive and independent insurance agents.
- Captive agents are only authorized to sell insurance products from the company they represent and its affiliates. State Farm, Allstate and Farmers are among the major companies that use captive agents. If your application for standard car insurance with Farmers is denied, the agent is likely to provide you with a quote from its non-standard affiliate Bristol West.
- Independent agents are authorized to sell insurance products from many different companies. Independent agents can often get quotes from three or four non-standard auto insurance companies at once, which can make it easier to shop.
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