If you want to drive in the United States, car insurance is a necessity nearly everywhere. Not only is having auto insurance mandated by law, but it’s also a necessary safeguard against personal and financial catastrophe: if you get in an accident, you could end up bankrupt from medical bills even if you aren’t at fault — and if you are, the lawsuits could leave you financially ruined.
But what if life circumstances leave you unable to get car insurance? And that doesn’t mean having difficulty affording insurance — it is possible to be entirely denied insurance by carriers, which could leave you in a very difficult position. So why might a person get denied auto insurance, and what can they do about it should that occur? We’ll explore this problem, and some solutions, below.
Why Are Car Insurance Claims Denied?
There are a lot of reasons why an insurance company won’t cover your vehicle, and many of them can happen through no fault of your own. Certainly, a poor driving record full of violations or a history of DUIs can make it difficult or impossible for you to get car insurance — but that’s not the only reason auto insurance companies sometimes deny a policy.
One common reason is auto theft. Insurance companies might decline to cover a vehicle if it’s particularly prone to being stolen in the area where you live — insurers deal in risk, after all, and if a certain kind of risk is prohibitively high, they may well pass on it.
These elements also combine: a high-risk driver with a poor traffic record and an expensive sports car isn’t an attractive customer to an insurance company. The risk of a big payout is simply too large, and there is every chance a policy might get denied in this instance.
Another factor that can play into whether or not you can get cheap car insurance — or any auto insurance at all — is credit rating. Although the practice has been banned in some states, a poor credit rating can still result in getting turned down for a policy.
Finally, there’s the fact that in some states, it’s difficult for anyone to get insurance. Florida is now a famously difficult state to get car insurance in — between the skyrocketing costs of natural disasters and extreme weather events, an epidemic of uninsured or underinsured drivers, and a massive amount of insurance fraud, some insurance companies are pulling out of the state altogether — and may never be back.
Addressing the Issues
If your policy was denied, all is not necessarily lost. In many cases, you do have recourse. For example, if you were denied a policy because of your driving record, steps you could take might include:
- Keeping a clean driving record in the future, eventually leaving those past infractions behind.
- Taking a defensive driving course, which can both earn discounts with insurers and earn discounts with insurers.
- Taking steps to improve your credit rating.
If your policy was denied because of an expensive or risky vehicle, consider trading it in or selling it and getting something more insurable.
Shopping Around
Another possibility if you’re facing insurance rejection is to shop around and compare auto insurance quotes. Some companies are more lenient than others when it comes to certain criteria, such as driving record, credit history, and so on. There are free tools online that can help you shop and compare quotes — The Zebra’s Kristine Lee has even compiled a list of some of the best cheap car insurance in the United States.
Lower Your Coverage
You can pose less of a risk to some insurance carriers if you forego comprehensive and collision coverage and roll with liability only. You won’t be covered for anything except the other driver’s damages, but it will protect you from lawsuits and legal complications.
Get On a Relative’s Policy
This is a common option, especially for younger drivers: if your household shares vehicles, get your name onto another person’s policy. The premiums are likely to be more favorable than if you took out a policy of your own, assuming the other party is willing to accept a portion of the risk.
State’s Assigned Risk Insurance Companies
If you’ve been rejected multiple times for an auto insurance policy, one option may be to find high-risk, non-standard insurance coverage through specialized businesses or the state. Your premiums will likely be considerably higher, but it’s a legitimate avenue that won’t leave you high and dry if you should get in an accident.
Seek Out an Insurance Agent
Finally, if things seem overwhelming or you’re at the end of your rope, consider seeking out the assistance of a professional. Insurance agents have extensive knowledge of the insurance market — that’s their job, after all — and they may be able to provide you with solutions you might not find on your own.