The whole industry is built on taking risks and they are good at assessing them. Obviously, it is actually getting more of a possibility to set the rates so razor sharp that every detail in every driver’s life is actually calculated to minute detail with advanced programming. In the meantime, it is worth knowing and understanding car insurance tiers to appreciate how it all works.
There are good drivers at the top of the chain. They are favored by most companies and therefore they get the best possible deals. Also, it is easier for them to shop around and find even cheaper auto insurance from other carriers. This group hardly ever makes a claim and they never miss a premium or have a gap in their coverage. They also don’t have any traffic tickets and have good credit scores. There is a reason why they are called good.
The next level isn’t perfect but the motorists in this category have negligible imperfections in their driving and financial lives. They may have had a claim say four years ago, have not a great credit or don’t just have enough history behind them. Most drivers fall into this risk group because it is the one that accepts little issues and doesn’t penalize you heavily for it.
Things start getting complicated if you cannot fit in any of the above two groups. The next level is straight up for high-risk drivers, who can be there for a variety of reasons. They may be too young yet and considered totally unknown due to lack of history. Also, age is statistically against people. They are usually a liability when they are at the beginning or end of their driving lives.
A recent at fault accident would put you straight in there regardless of everything else. Companies can look at a small incident where slight reluctance caused a minor one vehicle incident. But they cannot ignore a huge collision where the driver was at fault. They are worried that this will turn into a pattern and more will come.
The last one is for uninsurable drivers who may have had far too many accidents or drinks. Companies drop repeat offenders like a hot potato. They don’t feel they are obliged to stick their neck out for them. Once you get to this level, 9/10 companies will not even offer a quote for you. And the ones that offer will want an arm and a leg for it.
Usually there is a state arranged coverage for such motorists. In some cases, states may arrange special programs just to get them insured. The companies that serve in that state would join the pool and take some of these drivers. But their risk would be limited due to the special permissions that allow them to be insured at lower liability limits.
Knowing where you are in this ladder will help you understand your situation. For example, being a standard driver doesn’t prevent you from getting good car insurance quotes. You are still alright and there are plenty of companies which are willing to take a chance on you because you can essentially go either way.
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