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Nonstandard Auto Insurance: What It Is, How It Works

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

What Is Nonstandard Auto Insurance?

Nonstandard auto insurance is a category of insurance designed for drivers who insurance companies consider to carry the most risk of an accident. A driver might need nonstandard insurance if they have a poor driving record, a history of accidents, or other factors that the insurer considers to be higher risk.

Not all insurers offer nonstandard auto insurance. This type of policy is typically more expensive than a traditional car insurance policy because the insurance company believes there's a greater likelihood that the driver might file a claim due to an accident.

Key Takeaways

How Nonstandard Auto Insurance Works

When you request a quote for a car insurance, you'll provide personal information like your age, address, driver's license number, and history of insurance coverage. You'll also provide your vehicle's make, model, age, and mileage. Based on this information, the insurance company will calculate how much risk you pose—essentially, what likelihood there is that it will have to pay for the costs of an accident or other damage.

Every insurance company considers risk differently, and not all insurance companies offer nonstandard coverage. But once you have purchased a policy, nonstandard auto insurance is essentially the same as any other auto insurance coverage—with a higher premium.

Reasons for Nonstandard Auto Insurance

An insurance company may determine that you require nonstandard coverage for various reasons, including:

Some insurance companies call this type of coverage "high-risk auto insurance," referring to the higher potential for these drivers to file a claim.

If you don't own a car but occasionally need to drive someone else's vehicle, you might purchase non-owner car insurance, which covers bodily injury and property damage liability. Some insurers classify non-owner car insurance as a type of nonstandard insurance.

Nonstandard vs. Standard Auto Insurance

Standard auto insurance meets the minimum amounts of coverage required by your state. Typically, coverage includes bodily injury and property damage liability, and it may also include collision, comprehensive, medical payments or personal injury protection, uninsured motorist protection, and more. Depending where you live, some of these coverages may be optional.

Nonstandard coverage includes many of the same types of insurance, but is designed for drivers deemed to be a higher risk of filing a claim—and therefore requiring the insurance company to pay damages. Because of this higher potential for claims, insurance companies typically charge higher premiums for nonstandard auto insurance than they do for equivalent standard coverage.

Some insurance companies don't distinguish between standard and nonstandard auto insurance, and simply calculate rates based on the information you provide. For example, Progressive says it doesn't use the term "high-risk auto insurance," but may charge higher premiums to drivers with a history of accidents or little experience.

How Much Does Nonstandard Auto Insurance Cost?

As with standard coverage, insurers consider factors like your age, location, driving record, vehicle characteristics, and more when they calculate your rates. Premiums for nonstandard insurance are typically higher than those for standard coverage. It's a good idea to request quotes from several companies so you can compare them and find the best coverage for your needs.

How Long Are You Considered a High-Risk Driver?

The answer depends on why you were deemed "high-risk" and your state's regulations. Minor violations, like speeding tickets, may drop off your record sooner than more serious ones, such as DUIs or driving without insurance. The amount of time you need an SR-22 also varies by state; for example, Washington requires drivers to hold an SR-22 for three years in most cases.

Where Can You Get Nonstandard Auto Insurance?

It can be tough to find nonstandard auto insurance because not all companies offer it, and some don't distinguish it from their other policies. A good place to start is our list of the best high-risk car insurance companies, which includes State Farm, Dairyland, GEICO, and more.

The Bottom Line

Nonstandard auto insurance covers drivers who have been deemed to have a higher risk of filing a claim with their insurance company. This designation might be due to a lack of experience or lapses in insurance coverage, or a driving record that includes traffic violations like DUIs or multiple accidents. It often costs more than a standard car insurance policy, and not all insurers offer this type of coverage.

Dairyland Insurance. "Nonstandard Auto Insurance: Your Ultimate Guide."

Progressive. "What Is High-Risk Auto Insurance?"

National Association of Insurance Commissioners. "Auto Insurance."

Washington State Department of Licensing. "Financial Responsibility (SR-22)."