Will auto insurance evaders face higher premiums?

After a long period of time, will it be difficult for a person to purchase auto insurance coverage? When people drive uninsured because of tough financial times, many Americans find themselves in situations like these. Poor driving records and indolent attitudes might also result in being uninsured for a long period of time.  

Before selling policies, insurance companies investigate all potential policyholders. Here is what your auto insurer going to do when he finds out that you have been uninsured for a period of time and now want to purchase a policy:

• Look at your credit history or credit score in order to find out exactly how responsible you can and have been financially. 

• Look into your past and see how much of a risk you gauge.

• Evaluate your driving record.

• See if you have any medical conditions that might affect your driving skills later on in the future.

When your insurance company finds out that you have no claims history because you had no insurance, you might find yourself in the “high-risk” or “nonstandard” driver category that might later cost you a lot more than just a clean title. By being categorized into those categories, you are bound to have problems. One of these problems includes very high premiums and a low chance of you getting into another company.

Kathleen Jensen, insurance services counsel at the National Association of Independent Insurers claims, “They’re not going to get a discount for being a long-term policyholder, that’s for sure. It would affect the person the way any other insured would be affected. If you’re a poorer risk, you might pay more than a standard-risk person.”

“We could not insure an individual who’s gone [several] years without coverage because of the long-term absence of insurance experience. We’ll look at each individual case, and I’m not going to say we put a year limit on individuals, but [several] years is too long a time without a track record of insurance, even with a clean driving record”, claims Bob Cunningham, spokesperson for Nationwide Insurance Co.

Dennis Schain, a spokesperson for The Travelers says that his company would accept drivers who have had a lapse in coverage and the customer might even be eligible for a preferred rate, standard rate, or nonstandard rate, depending on the length of the insurance delinquency. “There’s potential for higher rates, but it all depends on the person’s vehicle and his or her driving history”, says Schain.