Insurance companies are just that: companies. They are money-making enterprises that provide a service to the majority of Americans. However, some people are just too high risk for them to insure and still be able to make a profit.
High Risk customers may have been categorized as such because they have a pre-existing health condition, or they are young and live near many dangerous driving intersections, or they filed a large homeowner’s insurance claim and the company has chosen to not renew their policy.
If you are one of these people with an uninsurable risk, what are you supposed to do? Fortunately, each state has a high risk insurance net to catch many of the people who fall through the cracks.
Auto High Risk Policies
Most states make auto insurance mandatory, and many have a high risk auto insurance plan or high risk pool to cover licensed drivers that commercial insurance companies deem uninsurable. The best way to start this process is by contacting an insurance agent or getting an online quote. Most plans stipulate that you need to have been rejected by a certain number of insurance companies in order to qualify for the high risk insurance, and so your agent can exhaust all possibilities. After three or so rejections, the insurance agent can fill out the necessary paperwork to submit to your state motor department. You can do this yourself, but first you should contact your Department of Motor Vehicles to understand the process and get the proper paperwork.
Expect that your coverage for high risk drivers will only meet the state minimum policy coverage, and that your premium will be higher than normal due to your higher risk. If you have a clean driving record for three years or so, you can normally find coverage again from a commercial insurance company.
Homeowner High Risk Policies
Losing your homeowner insurance can be a result of a claim you have made, or because you are in a high risk area, or a weather-related incident. But in order to keep your mortgage and stay out of default, you must have insurance. Talk about being stuck between a rock and a hard place.
If your insurance company does not want to renew your policy, they are forced by law to give you a 30 day notice (and if they don’t, they must renew). In that 30 days, you need to find yourself new insurance or your bank/lending institution will purchase a forced-placed policy. The good news is that you will most likely find insurance because it is in your lending institutions best interest. The bad news is that your premium will be much higher.
If you don’t have a mortgage, or if your premium is astronomical under the forced-placed policy, you have a third option. Fair Access to Insurance Requirements (FAIR) is offered in each state to people who are uninsurable. Once again, these plans will cost you more in premium and will offer less coverage, but they could be less than the forced-plan policy. You should contact your state’s Department of Insurance for more information on how to apply for this policy.
Health High Risk Policies
If you have certain pre-existing conditions such as diabetes, asthma, heart conditions, etc., then you may find yourself uninsurable, or insurable but with a list of uninsurable conditions and exemptions that reads like a phone book.
Fortunately, each state must now offer health insurance through a Pre-Existing Condition Insurance Plan (PCIP) for high risk people. The following must be true for you to qualify: you have been uninsured for six months or more, you have been denied coverage or denied coverage for your specific Pre-existing Condition, you have a Pre-existing Condition, and you are a US citizen or national, or you are lawfully present in the United States.
This coverage is now available due to the new Health Care Reform Bill.
Check out the healthcare.gov website and go through the questions to see what is offered in your individual state, and whether or not you qualify.