Car Insurance for High Risk Drivers: Every Option When the Quotes Are Too High

A common version of this problem looks like this. Someone is about to turn 18, has a couple of at fault incidents on record, and their parents plan to take them off the family policy. They have never bought insurance before, they expect to be turned away, and the first quote comes back at a number that looks like a typo. If that's you, or you're an adult in a similar spot, here is every option I know of, including a few people don't hear about until after something goes wrong.

What "high risk" means to an insurer

Insurers use the term loosely. Multiple tickets or at fault accidents, a DUI or reckless driving conviction, a lapse in coverage, a required SR-22 filing, and being a young or inexperienced driver can all land you in the nonstandard tier. The coverage is generally the same as a standard policy. The price is what changes. Some major insurers write nonstandard policies, and specialty high risk companies sell them too.

Option 1: Stay on a household policy if you can

If you live with your parents, turning 18 does not automatically mean coming off their policy. Progressive's guidance is that there is no age limit that prevents you from staying on your parents' policy as a listed driver, and that all drivers who share the same permanent residence should be listed. Full time students who move away for school can usually stay on too. Moving out permanently is what typically means getting your own policy.

Staying on a household policy is usually cheaper than a young driver buying alone, but your record will raise the household's premium, so expect a real conversation with your parents about cost. Some families choose to remove the driver instead, and that brings up the next point.

Be careful with exclusions. An excluded driver is a household member listed on the policy as not covered to drive the insured vehicles. If an excluded driver takes the car and crashes, the insurer can deny the claim, and the family can end up paying for the damage. An exclusion means you do not drive those cars, not even for a quick errand. If you're excluded, you need your own policy on your own car, or you stay out of the driver's seat.

Option 2: Use an independent agent for the nonstandard market

An independent agent can quote several companies at once, including ones that specialize in drivers with rough records, which saves you from filling out quote forms one by one. The prices will still be high. The goal is to find the company that weighs your record the least.

Disclose everything on the application. Insurers check your driving record and claims history, and a policy can be voided or a claim denied over something left off the form. A past incident can be priced. A discovered omission is much harder to recover from.

Option 3: Take a defensive driving course, but check your state first

Some states reward an approved course with a discount, and a few attach other benefits, but the rules differ a lot.

New Jersey. A state approved defensive driving course can remove two points from your record, but only if you have points on it when you finish, and you can use the two point reduction once every five years. On insurance, New Jersey law requires insurers to offer a rate reduction for completing an approved course, and it has to last three years. The exact size is set by each company, and course providers commonly cite around 5 percent, so confirm the amount with your insurer before you sign up. The state publishes a list of approved classroom and online providers, and certificates from drivers aren't accepted, because the provider reports completion directly.

Georgia. The mandatory discount is at least 10 percent for three years, but it depends on age. Drivers 25 and older need a defensive driving course of at least six hours. Drivers under 25 need a full new driver course with at least 30 hours of classroom training and six hours of practical training. Every named driver on the policy has to meet the record requirements, which include no traffic offenses and no at fault claims in the prior three years. The law also lets insurers offer the discount to drivers who don't meet all of those conditions. If you have recent incidents, ask the company directly.

Other states. New York requires insurers to give a discount to drivers of any age who finish its approved course. Most other states only require the discount for older drivers, which leaves it up to each company for everyone else. Massachusetts, Michigan and Hawaii don't offer a course discount at all.

Even where a course doesn't change your premium, it can still be a smart move for the driving skills. Just don't pay for one expecting savings until your insurer confirms the discount applies to you.

Option 4: Your state's last resort plan

If companies in the regular market turn you down, many states have a program that assigns high risk drivers to an insurer. These go by different names. New Jersey's is the Personal Automobile Insurance Plan, and California's is the California Automobile Assigned Risk Plan. They aren't insurance companies. They match eligible drivers to insurers that have to take them.

New Jersey's plan, as an example. To qualify, you certify that you were turned down by the voluntary market at least twice in the last 60 days, you live in New Jersey, you have a car registered or about to be registered there, and you hold a valid New Jersey license. A driver whose license is suspended for lacking insurance may also qualify. You can apply through a participating agent, and the plan offers a basic policy and a standard policy. The basic policy has $5,000 of property damage and $15,000 of personal injury protection, with no bodily injury coverage, so it leaves you exposed in a serious accident. Rates are standardized across companies, premiums are usually higher than the regular market, and coverage typically runs three years before your record is reviewed. You can pay in full or put down a deposit and pay the rest in installments, and you can switch to a cheaper policy later and get a refund of unused premium.

California's plan. Only certified agents and brokers can submit applications, so you can't apply on your own.

Treat these plans as the last resort they're meant to be. They usually cost more than anything else, so use the independent agent route first. Their existence does mean a driver with a bad record isn't left with nothing.

Option 5: Low income programs

Two states run programs aimed at drivers with limited income.

New Jersey's Special Automobile Insurance Policy, known as dollar a day insurance, is for people enrolled in Federal Medicaid with hospitalization. It costs $360 a year paid up front, or $365 in two installments, and drivers with a revoked or suspended license or registration aren't eligible. The coverage is very narrow: emergency treatment right after an accident and care for serious brain and spinal cord injuries up to $250,000, plus a $10,000 death benefit. It does not include liability coverage for damage you cause to anyone else, or coverage for your own car, so read what it includes before you rely on it.

California Low Cost Auto is for drivers 16 and older with a California license, a vehicle worth $25,000 or less, and household income at or below 250 percent of the federal poverty guidelines, which the state's latest report puts at about $39,900 for a single person household. It requires a good driving record, defined as no more than one at fault property damage accident or one point for a moving violation in the past three years, and no injury accidents. New drivers can also qualify, though those with less than three years of verifiable driving history pay a 55 percent surcharge. Liability premiums run from about $199 to $418 a year depending on the county, so check the current figures before you apply.

Option 6: Shrink the bill itself

When you can't change your record, change what you're buying.

• Look at the car. Insurance costs more on newer and higher value cars. If you're choosing a car, get quotes on it before you buy.
• Think about collision and comprehensive on an older car. If the car is paid off and worth very little, dropping those coverages lowers the premium. The tradeoff is that you pay for your own car's repairs. Carrying only the state minimum liability limits also leaves you exposed if you cause a serious accident, so decide with open eyes.
• Raise your deductible if you have savings to cover it.
• Ask about telematics. Some companies use driving data only to give discounts, which means there is little downside if your driving is good, and some are more forgiving than others. Ask how each company uses the data before you sign up.
• Ask about pay per mile policies if you barely drive. They combine a monthly base rate with a charge per mile, and they tend to save money for people who drive less than roughly 40 miles a day. They aren't sold everywhere, and the base rate still depends on your record, so compare quotes to see how a high risk profile is priced.
• Ask whether paying in full lowers the price. It often does, and it helps you avoid missed payments.

If a company drops you

Getting non renewed is stressful, and the worst response is letting coverage lapse while you sort it out. A lapse is treated as another mark against you and can add to your next quote. Line up the next policy before the old one ends, even a basic one. If you need a court ordered SR-22 filing, your policy has to stay continuous the whole time, or your license can be suspended again. If you don't own a car but need to keep your history unbroken, a non owner policy exists for that.

Why driving without insurance costs more than it saves

When the quotes feel impossible, driving uninsured and hoping for the best can look like the practical choice. It tends to cost more. Depending on your state, you can face fines, towing and storage fees if your car is impounded, license suspension, reinstatement fees, and an SR-22 requirement, which makes your future insurance more expensive for years. If you cause an accident, you're personally responsible for the other person's medical bills and property damage. The full breakdown is in our guide to what happens if you drive without insurance. The hassle of dealing with the DMV, the court and the tow yard can end up feeling worse than the original premium.

When nothing fits your budget

If every option still lands at a number you can't pay, the lowest cost move is to not drive for a while. That can feel like losing independence, so it helps to put numbers on it. Compare your monthly premium, plus gas, parking and maintenance, against a transit pass plus occasional rideshares, rides from friends or family, a carpool, or a bike for short trips. For many people the transit side wins, especially in a city. If you have to keep the car, ask whether you can park it and keep a minimal policy on it so your coverage history stays intact while you save up.

This usually isn't forever. Most at fault accidents stop raising your rate after about three to five years, so a clean stretch brings the price down. A few months on a bus is a lot easier than a suspended license.

The bottom line

A bad record makes insurance expensive, not impossible. Start with a household policy if you live at home, have an independent agent shop the nonstandard market, check whether your state rewards a defensive driving course, and know that a state run plan exists if you're turned down. Look into low income programs if you qualify, and trim the bill where you can. And if the numbers still don't work, public transportation beats driving without a policy.