Auto insurance companies have the right to deny auto insurance coverage to anyone they consider a high-risk driver. Yes, many auto insurance companies will deny coverage – or at least charge prohibitively high rates – to those who have a felony.
Auto insurance companies don’t have a specific prejudice against convicted felons. Instead, they have a prejudice against high-risk drivers. People with a felony tend to be higher-risk drivers than those without a felony. Thus, car insurance companies might deny coverage or charge higher rates to felons.
Reasons You May Be Denied for Auto Insurance
Car insurance companies will deny anyone who is considered a high-risk driver. Remember: the auto insurance company wants to make money from you. The best outcome for the insurance company is that you continue paying for your policy without ever making a claim. When an insurance company insures a high-risk driver, it significantly increases their chances of paying for a claim.
With that in mind, here are some of the reasons you might be denied for auto insurance – whether you’re a felon or a high-risk driver for other reasons:
- A DUI/DWI conviction or other serious traffic violations
- One or multiple serious/injury-causing accidents
- Several traffic violations
- Poor credit rating
- A history of insurance violations, including lapses in car insurance coverage
- Owning a high-performance car
Your Policy Might Be Canceled Because of your Felony
If you’ve recently been convicted of a felony, then you might receive a call from your insurance company informing you that your policy has been canceled – or that it will not be renewed.
In some situations, people have a 30+ year driving history with no claims and no accidents. However, they get a single felony and their insurance policy is canceled – or becomes prohibitively expensive.
Fortunately, you’re not the only person in the world with a felony. If you’re trying to apply for car insurance with a felony, then you have a number of options available to avoid denial or to lower your costs.
How to Purchase Car Insurance with a Felony
If you have a felony but need car insurance, then you’ll first need to shop around to all local insurance companies. Applying for a quote is always free.
Some insurance companies specialize in covering low-risk drivers. These companies are unlikely to accept high risk drivers – including felons.
Other insurance companies specialize in covering high-risk drivers. These companies charge higher rates – but for some high-risk drivers, they’re the only option.
If you’ve been denied by three or more “ordinary” car insurance providers, then you might consider looking at high-risk auto insurance.
How Does High-Risk Auto Insurance Work for Felons?
Car insurance companies often deny coverage to felons. However, there’s a caveat: these companies are denying you standard insurance coverage.
“Standard” insurance coverage is one of several insurance tiers. Most companies have two or three tiers of insurance coverage. There’s standard insurance coverage – which most people pay – along with high-risk insurance coverage – which individuals perceived to have a higher driving risk will pay.
Most companies work on both tiers. Some companies do, however, specialize in high-risk auto insurance. As you might expect, these companies charge considerably higher rates than hybrid insurance companies or low-risk insurance companies.
Search for high-risk auto insurance in your state. Virtually every state has some type of high-risk auto insurance provider. Remember: there are millions of felons in the United States. You’re not the only one dealing with this problem.
State Car Insurance Providers
Some states have a vehicle insurance plan available to residents. These states solve a crucial problem in the market: states require drivers to have vehicle insurance, but some drivers (like felons) keep getting denied for coverage.
That’s where state car insurance providers can help. All states that legally require drivers to have car insurance also have programs to assist drivers with getting the minimum amount of car insurance.
These programs include state car insurance plans or “assigned risk plans”. Typically, you’ll need to meet certain requirements to qualify for these plans. Many states require you to have been denied coverage from at least three providers before qualifying, for example.
There’s a difference between state car insurance plans and “assigned risk plans”.
State Car Insurance Plans: When you get coverage through a state car insurance plan, your risk is shared between participating insurance companies.
Assigned Risk Plan: When you get coverage through an assigned risk plan, you’re assigned to a car insurance company that will provide you with your needed car insurance coverage.
If you’re applying for car insurance as a felon, then these two plans may be your best options.
Ultimately, there are millions of felons who drive every day in the United States. These felons have been able to find auto insurance. Yes, finding auto insurance as a felon is more difficult. Yes, auto insurance for felons is more expensive. However, it’s still a safer option than driving without car insurance as a felon.
If you have a felony, then keep applying for car insurance in your area. If you keep getting denied, then start looking at high-risk insurance companies.
If you can’t find a high-risk insurance company at a reasonable rate, then consider looking for state insurance plans or assigned risk plans, which are state-level programs designed to assist drivers – including felons – who have been denied insurance coverage.