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If your driving history is full of transgressions, finding a company that'll sell you a car insurance policy can be difficult.
A couple infractions could cause higher rates, but rack up too many serious convictions or tickets and insurers may prefer not to get involved with you at all. This creates big problems if you own a car and lack the insurance required in your state.
If your application for auto insurance is denied, entering the state assigned-risk pool may be the only way to get the coverage you need to drive legally.
Here’s a look at what car insurance assigned-risk pools are and how to know when it’s time to jump in.
What is an assigned-risk car insurance pool?
Drivers who are deemed too risky may be unable to buy car insurance on the private market. But they still need coverage by law if they own vehicles, so states assign them to insurance companies that operate in the state. This grouping is known as the “assigned-risk pool,” “residual market” or “shared market.” Sometimes it’s called the joint underwriting association.
What problems put drivers in the assigned-risk pool?
Each state has its own eligibility rules for the assigned-risk pool.
Typically, if you've tried to buy auto insurance in the past 60 days and were turned down, you can apply to your state’s assigned-risk pool. Some states may require that you be turned down more than once.
Reasons you may be denied car insurance include:
Major driving convictions (DUI or DWI, hit-and-run)
Multiple accidents, tickets or claims on your driving record
Having little or no driving experience
Insurance prices and coverage options for assigned-risk drivers
Expect your auto insurance premiums to be substantially higher in the assigned-risk pool. Your policy options also may be limited to the state minimum liability requirements. Some states may allow you to earn a discount on your assigned-risk pool insurance plan after a certain amount of time with no accidents or driving convictions.
How to find your state’s assigned-risk pool
Generally, any car insurance agent in your state can help you with an assigned-risk policy. You may be asked to prove, declare or certify that you have no other options for buying insurance, depending on the state.
» MORE: What does car insurance cover?
How to get out of the assigned-risk pool
States require insurers to renew assigned-risk pool policies for a set amount of time, generally three years. Assuming you pay your premiums and your driving record stays clean during your pool time, you'll likely qualify for a regular policy by then. If you don't, you can reapply to the assigned-risk pool.
You may be able to climb out of the pool faster if:
You find an insurance company that is willing to sell you a standard policy
Your assigned-risk pool insurer offers you a traditional policy