By Dana Rather
Here is the sad truth that nobody ever talks about: when you are in debt (or other disastrous financial straights) it isn’t just the decisions you make about your money that affect your life. Every decision you make, even the seemingly small ones, is incredibly important and can have a huge impact on your life. Here’s an example from my life:
I was running late for a job interview, so I took an unfamiliar — but supposedly faster — route than I had originally mapped out. On the way, I blew through a stop sign because I wasn’t looking closely enough at my surroundings. A quick glance at the corner said “nope, no sign, no worries.” Had I been paying attention, I’d have seen the great big red octagon that was only partially obstructed by a leafy tree branch. But I wasn’t and so, suddenly, I had a huge ticket that I had to find a way to pay. It might not have ordinarily been a big deal, but this was my fourth ticket and I had so many points on my license that I was in danger of losing it completely. My insurance agent called me to talk about my premiums and suddenly I was at risk of losing my insurance. To keep it, I had to let the insurance carrier classify me as “high risk.”
This isn’t the only way to be considered high risk, of course. There are others. The most common one is being caught without insurance. Thank goodness that wasn’t the case with me; it might have meant a suspension of my license as well as a huge hike in insurance costs for me.
I can tell you, from personal experience, that being classified as a high risk driver is not the end of the world. It can, however, be really expensive, if you aren’t careful. it’s also embarrassing because it’s something that can be avoided and really shouldn’t happen to anyone, but I was lazy and found myself in this position. Here are the things I did to keep my “high risk” classification from ruining my finances.
I ended up being labeled high risk due to a combination of unlucky situations that compiled upon each other to raise a bunch of flags when it was time to renew my insurance policy. There are a lot of other ways to get labeled this way, but all have to do with poor driving, but those aren’t the only reasons. Getting a DUI will also have a lasting effect and, even if you are lucky enough to keep your license, will definitely qualify you as high risk. Even age can have an impact. Drivers under the age of 25 and those over the age of 75 can and in most will be considered high risk. A friend of mine found out that her bad credit, and a cancelled insurance policy due to a missed payment lowered her into the high risk category. Fast sports cars and expensive vehicles, and/or living in area with high crime rates can also be considered high risk.
NOTE: I’d be remiss if I didn’t make sure you know that being caught without insurance can also land you on the “high risk” list. This is especially worth knowing because, if you get caught without insurance — especially if you have a DUI on your record, not only are you considered “high risk” but you will likely not be able to actually get regular insurance. Instead, you will be forced to purchase a special type of insurance coverage called SR22 insurance. This type of insurance can be incredibly expensive, so if this happens to you, be sure to spend some time shopping around for the best rates. Speaking of which… Shop around
One thing that I noticed when I was trying to find a high risk insurance policy that wouldn’t bankrupt me is that insurance companies are always competing. This means that there are lots of opportunities for you to shop around to find the best price. What made things much easier for me is that the high risk market is big and getting bigger and many online companies are fighting for space. The online market is a great place to check offers and compare prices, even if you have to get special SR22 quotes.
I spent a few weeks diving into the details of a bunch of different policies, determined to get the best deal, so be prepared to spend some time doing your own research. It’s easy to get impatient but try to remember that a few weeks of taking the bus and bribing friends for rides is for a good cause. You can save lots of money by shopping around and comparing rates. I did. And then I used some of the money I’d saved to buy presents for all of the friends who had been so great about ferrying me from place to place while I was uninsured.
One of the things that surprised me the most was just how easy it is for the DMV to make mistakes on your driving. Like with a credit history, a driving record changes over time. Old tickets, accidents, etc fall off of it over time (the amount of time varies by state). This meant that by keeping my head down (not literally) and staying out of trouble, I could actually wind up with a seemingly perfect record after a few years. Unfortunately, like with credit companies, the DMV doesn’t really keep up with these things. I had to keep a close watch on my record to make sure that my strokes of bad luck were actually removed when they were supposed to be. You might have to spend some time on the phone with or, like me, actually visiting the DMV to make sure things are removed properly, but it’s worth the effort.
Everything becomes a major balancing act. I found out that the cheapest cars were often the hardest to insure because they rarely had clean title records. Plus, very old and very cheap cars can also be very unsafe and that makes them more expensive to insure. So it was important for me to spend time searching around for a reasonably priced and very safe car. I quickly learned, the safer the car, the cheaper the insurance, and helped me to save money in two ways! It’s possible to overcome a high risk insurance status. I know it’s possible because I did it. It takes time and it might be frustrating, but you can do it.