Assigned risk plans in personal auto insurance



It has become increasingly difficult for some drivers to obtain automobile insurance. 

This is partly because most of these drivers are not average drivers.

 Because of poor driving records, most companies will not accept them because their loss experience is much greater than the average driver’s.

 However, it is in society’s best interest to have all drivers insured so they can live up to their financial responsibilities when accidents do occur.

Assigned risk plans, or automobile insurance plans, are voluntary agreements between insurance companies licensed in a particular state.

 These companies agree to share the poor risks among themselves. 

Because these risks are randomly assigned to the participating companies, they are called assigned risks.

 Each company accepts its share of assigned risk drivers according to the size of the individual insurance company.

In most cases, drivers in the assigned risk plan only have to be issued BI and PD liability coverage in the minimum amount required by state law. 

In some states, physical damage and medical payments coverage may also be issued.

There are several other methods besides assigned risk plans used to provide insurance for drivers whose records exclude them from obtaining coverage through normal channels. For instance, one state operates its own insurance company to handle such drivers. 

You should become familiar with the type of plan used in your state

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