April 16, 2021

How to move from nonstandard to standard auto insurance

Many states require car insurance to legally drive. It’s possible for drivers with expensive nonstandard…

Many states require car insurance to legally drive. It’s possible for drivers with expensive nonstandard auto insurance to save money and keep driving. (iStock)

In addition to the type of car needing car insurance, a person’s driving history is a primary factor for calculating the cost of auto insurance.

Having several recent accidents or being a new driver may require the driver to get nonstandard auto insurance, which is considered the priciest car insurance policy.

Upgrading to a standard insurance policy reduces the monthly premium cost. Even with nonstandard auto insurance, it’s possible to reduce a car insurance monthly payment by exploring auto insurance options online to find the best auto insurance company.

What does standard and nonstandard mean?

When getting an auto insurance quote, the car insurance company underwriting process uses your driving record to determine if you qualify for standard or nonstandard auto insurance.

Most drivers qualify for standard auto insurance. They likely have a clean driving history but may have several minor traffic incidents like a speeding ticket or an at-fault collision.

Nonstandard insurance is generally reserved for high-risk drivers that are more expensive to insure. These drivers may have recently been convicted of a DUI, for instance. Filing an auto insurance claim too many times in a short period can be another reason.

In most instances, standard and nonstandard car insurance policies have similar full auto coverage options. However, the monthly premium is usually higher for nonstandard drivers, and not every car insurance provider offers nonstandard auto insurance.

How do drivers get placed in the nonstandard category?

There are several reasons why a driver may need to get nonstandard car insurance:

  • Recent conviction of a DUI or must carry an SR-22
  • Driving while incurring a lapse of coverage or lack of car registration
  • Multiple incidents that result in an insurance claim
  • Younger than age 25
  • Older than age 75
  • Need a non-owner insurance policy on a primary use vehicle

Driving a vehicle with a “rebuilt” title may require nonstandard insurance. Insurers may only offer partial auto coverage with liability coverage but not comprehensive car insurance. Comparing multiple insurance quotes can potentially save you hundreds of dollars per year. Don’t leave money on the table! Visit Credible now to compare quotes free of charge. 

Why is it bad to have nonstandard insurance?

A nonstandard auto insurance policy usually costs more than standard auto insurance despite similar car coverage. 

The higher car insurance payment reduces the available income to pay for other monthly expenses. 

Also, having to file another expensive car insurance claim may cause the car insurance provider to cancel the car insurance policies of nonstandard drivers. 

Most states require car insurance coverage to legally drive and avoid potential fines. These drivers may have to stop driving if they cannot switch to a new car insurance service.

How can I move from nonstandard to standard insurance?

Switching to standard auto insurance usually requires time. 

Some of the possibilities include:

  • Drive incident-free for several years
  • Wait for previous accidents and claims to drop
  • Don’t file an insurance claim for non-collision damages

Improving your credit score can help, too, as many states allow insurance providers to use credit scores to determine insurance costs. Not sure where you fit on the credit score spectrum? Then you should start using a credit monitoring service to track changes to your credit score. Credible can get you set up with a free service today.

Tips on finding the right auto insurance for you

There are several ways to reduce car insurance costs upfront:

  1. Compare rates
  2. Increase deductible
  3. Carry state-required minimum coverage
  4. Cancel optional coverage
  5. Bundle insurance

1. Compare Rates

It’s important to compare coverage options for multiple insurers to find the best car insurance. Most car insurance servicers provide free rate quotes.

Looking at the auto insurance policy declarations page makes comparing rates easy and can help you avoid car insurance mistakes.

The declarations page lists these details:

  • Current coverage limits
  • Policy discounts
  • Driver information
  • Insured vehicles
  • Insurable interest (i.e. auto loan lienholders)
  • Car insurance expiration date

Checking rates at least once a year can help ensure you pay the best rates. Compare auto insurance companies and shop their plans via Credible.

2. Increase deductible

Raising the car insurance deductible reduces the monthly premium. But the out-of-pocket costs to file a claim are higher. Only increase the deductible to an amount you can afford.

3. Carry state-required minimum coverage

Most insurers offer higher auto coverage amounts but only buying the state-required minimum coverage keeps costs as low as possible. 

4. Cancel optional coverage

Having full coverage provides peace of mind when your car is damaged. If you buy a car with a loan, the lender and any cosigned party most likely require full coverage with collision and comprehensive car insurance. 

You may avoid add-on benefits like rental car reimbursement to minimize costs.

On older paid-for cars, only carrying liability coverage can be sufficient. The savings by canceling collision and comprehensive can be used to save for a new car or another goal.

5. Bundle insurance

Bundling car insurance with a homeowner’s, renter’s, or term life insurance policy can net a multi-policy discount.  

Final thoughts

It’s important to avoid overpaying for car insurance while getting the best coverage. It’s easy to save money and check car insurance rates for free through Credible.

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.