Reasons Why an Auto Insurance Company Might Refuse to Insure You
Reasons why an auto insurance company might refuse to insure you include having multiple DUIs and traffic violations, bad credit, and owning a high-performance vehicle. But just because an auto insurance company might deny coverage doesn't mean you can't find car insurance. You may have to go with a costlier insurance company, but shopping for multiple auto insurance quotes can help you find coverage you can still afford. Enter your ZIP code below to get your free quote.
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UPDATED: Nov 12, 2020
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Car insurance companies compete for your business. Sometimes, however, car insurance companies decline new business. Every day, insurance companies across America refuse to insure certain drivers. A driver might request a quote from a car insurance company, only to have their quote request denied.
Why would a car insurance company refuse to insure you? Today, we’re highlighting some of the most common reasons why a car insurance company might deny coverage.
Top 5 Most Common Reasons Why a Car Insurance Company Denies Coverage
Car insurance companies can deny coverage for a number of different reasons. Generally, all of the reasons below are related to risk: the insurance company believes you or your vehicle are too costly to insure, and that’s why your request for car insurance will be denied.
Multiple DUI, DWIs, or Other Serious Traffic Offenses
Some drivers are rejected by a car insurance provider because they’re considered to be too risky. A car insurance company might decide you are too risky to insure if you have multiple DUI/DWIs, or other serious driving offenses on your record. Some insurance companies avoid insuring drivers with multiple DUI convictions, forcing these drivers to work with higher risk car insurance companies.
Multiple Serious At-Fault Accidents
Car insurance companies check your driving record before deciding to cover you. Your driving record reveals the number of at-fault accidents in which you’ve been involved, but it also lists the amount that was paid for each claim. When you request a quote from a car insurance company, the car insurance company can see your claims history, including the number of at-fault accidents and the total paid out by the insurance company. If you have one or more large payouts on your driving record, then you may have trouble getting car insurance in the future. Typically, drivers with multiple serious at-fault accidents in the last five to seven years will need to buy high-risk auto insurance – or at least pay higher premiums with major insurance companies.
Multiple Traffic Violations
Sometimes, car insurance companies have no interest in insuring drivers with multiple traffic violations – even if those violations didn’t lead to major claims or damages. Let’s say you have 10 speeding tickets, for example. A car insurance company might assume that you have a tendency to drive unsafely. The insurance company might refuse to insure you in this situation.
Insurance companies check your credit score before providing you with car insurance. Insurance companies use a number called your ‘credit-based insurance score’. Your credit-based insurance score is calculated in a slightly different way than a traditional credit score. However, if you have a low credit score, then you also have a low credit-based insurance score. Drivers with really bad credit may be denied by certain car insurance companies. You may have to buy car insurance from a high-risk provider willing to insure drivers with bad credit scores.
A History of Insurance Violations
Some drivers have a history of insurance violations. If you have a history of frequently missing insurance payments, for example, or letting your car insurance lapse, then a car insurance company might have no interest in covering you in the future.
Owning a High-Performance or Unique Vehicle
Car insurance companies have specific formulas they use to calculate car insurance premiums for all popular cars. Some cars, however, break this formula, making it difficult for a car insurance company to extend coverage to you. If your car is a classic car, for example, then you may need to work with an insurance company that specializes in classic car coverage. Certain high-performance vehicles may also require special car insurance unavailable through a normal provider. An ordinary car insurance company, for example, might be unable to provide insurance for a $300,000 supercar, and your request for car insurance coverage may be denied.
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How to Buy Car Insurance After Being Denied
If your request for car insurance has been denied, then you’re not out of luck: you should still be able to buy car insurance and legally drive. However, you may have to work with costlier car insurance companies that specialize in insuring high-risk drivers.
Fortunately, a number of car insurance companies across America specialize in insuring high-risk drivers. The General is one well-known car insurance company that tends to attract high-risk drivers: The General has setup its pool of car insurance customers to be a mix of high-risk and low-risk drivers. High-risk drivers pay higher premiums, allowing The General to charge lower premiums to safer drivers, balancing out the pool and allowing The General to stay profitable.
Thanks to The General and other high-risk car insurance providers, you can still buy car insurance even after you have been denied by a specific insurance company.
Conclusion: Compare Quotes Online Today to Avoid Being Denied Car Insurance
Up above, we explained some of the most common reasons why a car insurance company might refuse to insure you. Some drivers have bad credit. Others have a history of multiple at-fault accidents or DUIs. Some drivers just own a high-performance car that requires special, customized insurance.
No matter why you were denied car insurance, however, you can compare quotes online today to find the right car insurance for you at a competitive price.