Insurance is all about risk. Car insurers measure risk by the likelihood of an insured event (e.g., a car accident) occurring which, requires them to pay a claim. While nearly all states require drivers to carry a minimum amount of auto insurance, companies can deny coverage to a driver considered too high-risk to cover.
What is a High-Risk Driver in Colorado?
Colorado Insurance companies generally define “high-risk” drivers as having a higher potential of filing a claim than an average driver. Insurers review your driving record in making the determination of your risk. In general, insurers are interested in your record over the last five years, although some states allow companies to look further back.
While there is no uniform definition of a high-risk driver, there are some common reasons why an Colorado auto insurer considers a driver is too risky.
- Conviction for driving under the influence of alcohol or drugs
- Serious violations including excessive speeding, driving without a license, reckless driving and any traffic violation resulting in a fatality
- New or inexperienced driver
- Drivers over a specified age (often, 70 years old)
- Lapse in car insurance coverage
- Bad credit score
- Professions requiring driving long distances
- Certain types of cars including exotic cars, sports cars, supercars and collectible cars
What does it Cover in Colorado?
Insurance companies are reluctant to provide coverage because they may cost them more than they make from the insurance policy. However, there are some key differences, making it more expensive and less comprehensive than standard coverage.
- Require only drivers named in the policy to drive the car
- Prohibit drivers under age 25 from driving your car
- Liability coverage amounts could be reduced if someone not named on your policy drives the car
- Your driving record may be reviewed more frequently
- Repairs might be covered at a depreciated rate rather than full cost
- The insurer might check your driving record more frequently
- Coverage might not apply if you are sued for punitive damages
- Perks such as accident forgiveness will not apply
If you do not comply with any of these restrictions, your insurer could reject your insurance claim. Make sure you understand what rules you need to follow before purchasing a policy.
What if I Can’t Qualify?
High-risk drivers unable to obtain insurance can buy a policy from your state’s assigned risk pool, which is for drivers denied coverage by insurance companies but required by state law to have coverage. In the assigned risk pool, drivers can purchase high-priced insurance policies from insurers required by the state to provide them. State risk pools are considered a last resort and drivers will need to show proof of repeated rejection from car insurance companies. Premiums from these policies are two to three times higher than the national average.
You should continue to keep shopping for insurance after being put into the assigned risk pool. The standard assigned risk period is typically three years in most states. You can always opt out if your assigned risk insurer offers you a voluntary policy or if you are able to find another insurer willing to give you a policy.
How Long Will I Be Considered a High-Risk Driver in Colorado?
Most Colorado insurance companies will offer forgiveness for accidents and poor driving record if your driving record remains clean for at least three years. However, the timing varies by insurers. Some will look back as a far as five years when assessing your risk. Once the violation or incident is off your driving record, your insurer will no longer to use it to increase your rates. It will vary by insurer. Some insurance companies will look back as far as five years. Many states use a point system and assign a score based on the gravity of the incident. Insurers also use a points system in which they assign insurance points for traffic violations, accidents and claims. The more severe the incident, the more points you receive.
Your insurance company may offer ways to reduce points on your driving record. Some insurers will reward drivers for attending traffic safety and defensive driving courses. In the meantime, improve your chances of losing the high-risk label by driving carefully, avoiding accidents and paying your insurance bill on time.