A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 15, 2021

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Here's what you need to know...

  • High-risk insurance is an option for drivers with less-than-perfect driving records
  • Indemnity insurance provides a way for drivers with traffic violations or DUIs to get insurance
  • Check around and compare for the best rates on this type of insurance

Sometimes it is difficult to get insurance. If you are someone who has traffic violations on your driving record or if you are considered high-risk due to past accidents or other factors, you may have to seek out alternatives. One alternative is indemnity insurance.

Indemnity insurance is insurance that is intended for high-risk drivers who have too many traffic violations on their driving record, have had multiple accidents, DUIs, or other offenses.

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What if I am turned down for standard insurance?


Sometimes when you apply for standard auto insurance with a company, you may be turned down due past driving infractions.

You may get a letter from the car insurance company that you applied with asking you to fill out a form for indemnity insurance. This is considered high-risk insurance and it is often more expensive than standard insurance.

In cases where you may not qualify for standard insurance, indemnity insurance may be your best course of action to make sure you are insured.

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Characteristics of High-Risk Drivers

Insurance companies have specific litmus tests that allow them to predict the possibility of accidents based on a number of specific factors. Companies strongly rely on statistical information and actuary data in order to come to their conclusions.

Below is a list of the highest risk factors in determining a collision:

  • New and inexperienced drivers – You may think that older drivers are the higher risk but it simply is not true. While senior drivers (age 85 or older) may have trouble seeing or judging distances sometimes due to advanced age or health issues, teenage drivers are the higher risk group. In fact, teens ages 18-25 have the highest record of fatal and bad accidents of any age group.
  • Drivers in the highest risk age group – If you are in the high-risk group (18-25), you pose a higher risk to insurance companies than if you are older.
  • Drivers with bad driving records – The best predictor of the future is the past. If you have several traffic violations or driving incidents, you are going to be considered a much higher risk for future accidents.
  • Drivers with DUIs and reckless driving charges – Likewise, if you have had DUIs or reckless driving charges in the past, you are considered a very high risk for accidents. Driving is hard enough for careful drivers. Being a reckless driver or DUI driver adds to the risk many times over.

What can I do to decrease my risk?

If you want to get yourself out of the high-risk category, here are some things you can do:

  • Keep your driving record clean – The best thing you can do to lower your risk as a driver and get better insurance rates is to keep your driving record spotless. This is especially true if you are in the high-risk age group (18-25) but it is true for everyone. Only by proving your driving record over time will you prove to the insurance companies that you are a lower risk.
  • Take a safe driving course – Some companies offer substantially lower insurance premiums to people who have successfully completed a safe driving course.
  • Age – As you age, your insurance rates will drop once you pass the age of 25, the top end of the highest risk group.
  • Never exceed the speed limit – If you always follow speed limit signs, you lower the risk of accidents and keep from building points on your driving record.
  • Never use cell phones to text while driving – Texting while driving has been linked to many serious accidents. Don’t do it.
  • Avoid DUIs and reckless driving – Take your responsibility behind the wheel seriously by never driving after drinking or engaging in reckless behavior.

Issues when Filing Claims


One of the things you need to be mindful of when you carry auto insurance is how to file claims correctly. Some examples of behaviors that can cost you big include:

  • Filing a false claim – Making a false claim on your insurance or attempting to file a claim on something that didn’t happen is a felony and punishable by huge fines and even jail terms. Filing false insurance claims are considered fraud and is punishable by at least one year and often much more. Don’t do it. Tell the truth when it comes to filing a claim.
  • Filing a claim for coverage you do not have on your policy – Similar to filing a false claim is filing for coverage you do not have. Granted, sometimes people forget what type of coverage they have on their policy, but if you willingly withhold or give information that is false, this is also considered insurance fraud.
  • Trying to seek compensation for exclusions – Anytime you try to bet monetary compensation for something that you do not deserve or have the rights to, this is considered fraudulent behavior. Not only can this cost you money in court but you could even get jail time if it can be shown that you did it intentionally.
  • Adding to your car’s value or physical features without informing the insurer – When you add to or change the physical makeup of your cars, such as adding stripes or decals, turbo chargers, or other gadgets, you may invite theft or cause your insurance rates to increase. You must report any and all changes you make to your insured vehicle as soon as you make them.
  • Driving under the influence – As mentioned, DUIs are one of the most serious offenses and they are also one of the primary risk factors that insurance companies don’t like to take. If you are charged and convicted of a DUI, your rates will increase dramatically because you are seen as a higher risk driver than those never convicted of this infraction.
  • Letting your policy lapse – If you let your policy lapse, you will not be covered in an accident. Even if the lapse period is just for one day, you will not be covered for any mishap which happened during the day you were not covered.

Falsifying information when reporting a claim is a very serious offense. You can protect yourself and your financial future by always being honest with your insurance company and providing all of the information the law requires.

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Finding the Best Policy

If you are considered a high-risk driver, the best thing you can do is find an insurance company that offers the competitive rates for high-risk drivers and ask if you might qualify for any sort of discount.

Keep your driving record as pure as possible by avoiding reckless driving, speeding tickets, or other infractions. With time, you will prove your responsibility to the insurance companies again and your rates will go down accordingly.

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  1. http://www.insurance-research.org/
  2. http://www.investopedia.com/terms/i/indemnity.asp?ad=dirN&qo=serpSearchTopBox&qsrc=998&o=40186
  3. https://www.nichd.nih.gov/health/topics/driving/conditioninfo/Pages/risk-factors.aspx
  4. http://www.legalmatch.com/law-library/article/what-is-a-felony.html
  5. http://www.investopedia.com/financial-edge/0212/how-insurance-companies-detect-insurance-scams.as…