What if No Insurers Will Cover Me?

Well, the good news is, it is not likely to be true that no insurers will cover you. There are insurance companies out there that cover all types of drivers but the most indigent and the extreme, in which case, state law probably prohibits you from driving as well. The only downside to needing coverage from these insurance companies is, of course, the price.

Why Would An Insurance Company Refuse to Cover Me?

There are a number of reasons that might cause certain insurance companies to refuse to cover you. First you must understand that the entire insurance industry, from car insurance to home insurance and even life insurance is a matter of risk. Insurance companies offer coverage to their clients based on the bet that the premiums they collect from all of them will outweigh the claims that they have to pay out. For the most part, the complicated structures that insurance companies and their underwriters have in place is successful in keeping this true: Insurance companies make billions. Some risks, however, are greater than others, and when it comes to auto insurance, this risk is most commonly measured by accidents.

If you have an accident that is likely your fault the insurance company isn't likely to drop you - they may raise your rates, however, to compensate for the increased risk you present to their bottom line. If you have another at-fault accident within too short a period of time, they will certainly raise your rates and may put you on a probationary status, notifying you that if you have another accident or claim within a specified period, they will deem you uninsurable and refuse to carry your risk any further. A third claim coming during that period of time and they will cancel your policy.

Once you have had your policy canceled by one insurer like this, you may find it hard to get insurance from other insurers as well. What risks you present to one, tend scare off the rest as well. So what's an accident-prone driver to do?

High Risk Pool Insurance

There are insurance companies out there that specialize in providing insurance to high-risk customers. These insurance companies specifically seek out those who have had problems or issues in the past with the major insurers -- and they make a killing of the exorbitantly (some may say extortionist) high premiums that they charge. With state laws requiring minimum levels of insurance coverage, however there is little alternative to paying these high rates for high-risk individuals. The one alternative - driving without insurance - is not only risky from a law-enforcement stand point but also from a personal finance standpoint; if you get into an accident without adequate insurance coverage, you can be personally sued for damages, even if the accident was not your fault, because you legally had no right to be on the road in the first place.

A final option for those who have difficulty getting insurance through a traditional company is to deposit a bond of insurance with their state. This is a sum of cash (usually $30,000 or more) that will serve as your insurance coverage in the event of an accident.

If you find yourself relegated to a high risk pool due to an unfortunate number of accidents take heart: usually time will heal the wounds in your driving record and, after a period of time, you will become eligible to rejoin the ranks of those who pay more moderate rates for car insurance.