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High-risk drivers are a burden on society. They make our streets unsafe and they pose a risk to your car and your wallet. You could be the safest driver in the world, but one way or another, high-risk drivers are costing you more in auto insurance. You just might not know it.

We all know auto insurance companies make money by charging you a premium to cover your car in case of accidents and other incidentals. The best case scenario for the auto insurance company (and you, for that matter) is that you never actually need to file a claim, because that’s when they lose money.

If you’re a safe driver, you may be eligible for additional discounts besides low auto insurance rates. But what if you’re a bad driver? A high-risk driver? In that case, you are a liability for insurers.

To price that cost in, insurance companies are forced to spread the risk around by increasing premiums across the board, not just on the high-risk driver’s policy. So when an insurer is exempt from having to cover high-risk drivers–like the new entrants in Massachusetts–it actually creates an unfair advantage over their competition.

Competitive Insurance Rates

A primary staple of capitalism is increased competition is bad for business, but good for consumers. The reason is because it is in each party’s own self-interest to seek the best option available. If one party outweighs the other, a shift in the spectrum occurs, and the minority will benefit because there is increased demand in the supply they provide.

Fewer companies selling a certain product means there is less competition and fewer choices for consumers to choose from. Conversely, more companies jockeying for the same position means consumers have the upper hand.

So while exemption for high-risk drivers may not be fair for those insurance companies left in the cold, it actually creates an advantage for auto insurance shoppers:

• Safe drivers only: Going with an insurer exempt from high-risk drivers means lower premiums since they take on less risk as a whole.
• Long-term benefits: Companies that are not exempt will need to innovate ways to overcome the disadvantage and attract customers. This could make the industry more consumer-friendly.
• Safer roads: Non-exempt insurers will also have a smaller customer pool of safe drivers to spread the risk. This means unsafe drivers will have to absorb those costs in the form of higher premiums. The increase in already high fees will add motivation to become a safer driver.

In the case of Massachusetts, the exemption for new entrants end in two years. This provides new insurers with an incentive to enter the market, thus creating more competition benefiting consumers, but also balances the playing field once they are established.

What Is a High-Risk Driver?

Of course, the group left in the cold is the actual high-risk drivers. Their options are limited and they are vulnerable to jacked-up prices from the insurance companies that can and will cover them.

A high-risk driver is anyone whose record indicates they are more prone to car accidents or other incidents:

• Inexperienced drivers: Though they may not have done anything wrong yet, newbies on the road pose as a threat just because they aren’t accustomed to the road.
• Accident prone: This is self-explanatory. If your history shows you are prone to auto accidents then you’re prone to file insurance claims.
• Repeat offenders: Drivers with more than one run-in with the law raise red flags as well. If you’re not following the rules of the road, chances are you’re posing as risk.
• Drunk drivers: If you have a DUI on your record, that one’s going to cost you. If you have more than one, you probably shouldn’t be on the road anyway.
• Thrill rides: If you have a modified muscle car or sports car, some insurers could categorize you as a threat, too.

What To Do If You’re a High Risk Driver

If you’re one of the unfortunate ones deemed a risky driver, go over the list above to see what you can fix. You can try taking extra safety driving courses to try and lower your premiums, or change your ride to one deemed safe by your insurer.

For the inexperienced, there isn’t much you can do about that except get a few more repetitions under your belt. However, you can try to piggyback onto the policy of a friend or relative who is a safe driver. This could help you to lower your premiums, but could also negatively impact what they have to pay.

Keep in mind, though, while premiums are important, there are many other factors to consider when picking the right auto insurer for you.