High-Risk Auto Insurance in Minnesota

Let’s check out what high-risk insurance is, why it’s more expensive than a standard policy, and how high-risk drivers can bind affordable policies without missing out on coverage.

Insurers will categorize drivers depending on the risk they pose of filing a claim. Drivers considered high-risk carry an above-average likelihood of filing a claim with their insurer. To compensate for that risk, companies will charge high-risk drivers above-average premiums. 

When it comes to car insurance, Minnesota law requires drivers to have a minimum amount of coverage on their policies. Those who fail to maintain enough coverage or forgo coverage completely risk being considered a high-risk driver. While some drivers may be considered high-risk because they have a DUI or a DWI on their record, others may fall into the category of failing to carry enough insurance coverage.

 Auto insurance laws in the state require drivers to have at least $30,000 in bodily injury liability coverage per person, $60,000 in bodily injury liability coverage per accident, $10,000 in property damage liability coverage per accident (30/60/10 liability coverage), $25,000 in uninsured or underinsured motorist bodily injury coverage (UMBI/UIMBI) per person, $50,000 in UMBI/UIMBI per accident (25/50 UMBI/UIMBI), and $40,000 in personal injury protection (PIP), since Minnesotans must adhere to the state’s no-fault laws. Those who lease or finance their vehicles may require collision and comprehensive coverage.

Drivers who fail to maintain adequate coverage may risk falling into the category of a high-risk driver, among other consequences of the crime. Driving without insurance in the North Star State is illegal and may yield penalties like fines, fees, license and registration suspension, or even jail time. Drivers who forgo coverage may also risk filing for an SR-22, which can cause one’s insurance premiums to double or, in some cases, triple.

While having a DUI or getting caught driving without insurance are common ways for one to be considered a high-risk driver, some drivers have inherent traits that put them at a higher-than-average risk of filing a claim. 

When insurers determine a driver’s premiums, they consider things like one’s insurance history and driving record, as well as one’s age, gender, and ZIP code. Some inherent traits, like age or gender, correlate with statistics that signify an above-average risk of filing a claim. 

For example, according to the CDC, teenage boys are at a higher-than-average risk of getting into or causing accidents than their peers. Thus, teenage boys or drivers with teenage boys insured on their policies may see above-average premiums. 

The average cost of a full coverage policy in the North Star State is about $1,550 annually, or about 10% more than the national average of $1,670 annually. While the average premium on a full coverage policy in the North Star State is below average, many high-risk drivers will have difficulty finding affordable rates. 

Whether you’re a high-risk driver looking for long-term or short-term insurance in Minnesota, auto insurance for high-risk drivers is typically tough to find, especially at an affordable rate. Many insurers charge high-risk drivers double or triple the average rate, making a full coverage policy nearly impossible to afford. 

However, there may be a few ways for drivers with poor records or insurance histories to save on their policies. While a driver with a poor record may have a tough time finding a policy from one of the state’s top insurers, those who can bind with such insurers will find that many offer plenty of stackable discounts to make their policies more affordable. 

For example, many standard insurers offer criteria-based discounts, like a student discount, bundling discount, and multi-car discount, that policyholders can stack if they meet the required criteria. Some insurers may also offer enrollment-based discounts like a usage-based discount or a pay-per-mile program in which policyholders can enroll to reduce their premiums significantly. 

While maintaining a full coverage policy from an insurer that offers plenty of discounts is a great way to stay protected on the road, such a policy may not be feasible for every driver, especially those considered high-risk. A minimum coverage policy is often the cheapest policy in the state, even though it won’t offer as much coverage as a full coverage one. 

A driver on a tight budget may opt for a minimum coverage policy, which is perfectly legal and sometimes necessary. Still, those who can make room in their budgets for extra coverage may find they’re better off for it. 

A full coverage policy in Minnesota will typically have higher limits of the legally required coverages and optional coverages like collision coverage, comprehensive coverage, or gap coverage, to name a few. While carrying such expansive coverage options can get pricey, budgeting for an insurance premium is easier and far more reliable than saving for a catastrophic accident in which the driver is uninsured or underinsured.

Drivers who can’t get a policy from a standard insurer, whether they can’t afford it or can’t find an insurer that will bind with them, may need to enroll in the Minnesota Automobile Insurance Plan (MNAIP) as a last resort.

Many states, like Minnesota, have assigned-risk insurance plan programs like the Minnesota Automobile Insurance Plan. Drivers who can’t get a policy on the voluntary market, meaning they can’t bind a policy with an insurer they select, may need to enroll in the MNAIP. 

Assigned-risk insurance plans operate on an involuntary market or insurance pool. Insurers are pooled together to offer policies to drivers on the involuntary market, and when a driver is assigned an insurer, neither can opt out of the pairing. Programs like the MNAIP are often a last resort for drivers who can’t bind a policy on the voluntary market, as assigned risk policies tend to be quite expensive. 

While some drivers may have to bite the bullet and spend some time on an assigned-risk plan, it’s important to remember that auto insurance rates ebb and flow over time, assuming high-risk drivers attempt to make better choices on the road. As one’s driving habits improve, so will one’s rates. 

Whether you have a poor insurance history, a bad driving record, or a couple of inherent traits working against you to raise your premiums, maintaining an auto insurance policy as a high-risk driver is crucial, even if that means shelling out a bit more than average for premiums. 

However, with the right tools, those who know where (and how) to look may find an excellent policy within their budget. A great way to find the policy that suits your needs is to get and compare quotes online.

Getting and comparing quotes online can help drivers make the most informed decisions about their policies. Luckily, here at Clovered, we have a free quoting tool you can use to access your unique quotes in minutes. If you’d prefer to chat with a professional, you can contact one of our licensed agents at 833-255-4117 or agent@clovered.com.