Not long ago, CNN carried a story about the financial and social hardships encountered by the nearly 70 million American adults with criminal records. If you have a criminal conviction, expect to be treated unequally when looking for car insurance. Auto insurance companies could charge you more or deny you coverage based on your criminal record.
But don’t despair. You still have a chance at getting decent auto insurance. Read on and learn why insurers are wary of people with criminal convictions and how to get affordable auto insurance.
Why insurers are wary of prospects with criminal convictions
It doesn’t matter whether it was a serious offense or a misdemeanor. Once convicted, a criminal record is a blot that makes you seem riskier to insurers.
Judging a person by their past mistakes may sound unfair or even cruel. But it is hard to beat cold scientific facts.
Research shows that people with criminal convictions have a higher chance of engaging in risky behavior. In auto insurance, this translates to a higher chance of accidents and claims. Therefore, a criminal record is a red flag to an auto insurer. It would affect your eligibility and your premiums.
How does a criminal conviction affect your auto insurance?
It wouldn’t be fair to treat a person with a minor offense the same way as one with a serious criminal conviction. Auto insurance companies know this and have guidelines on how to treat prospects with criminal convictions.
Although different (each company is unique), these guidelines have certain commonalities. For instance, if the conviction had nothing to do with driving or insurance, the insurer could overlook it. However, convictions related to traffic offenses or financial crimes such as fraud can significantly affect your ability to access auto insurance. Insurers have the right to decline to offer coverage. But some do not turn away prospects because of their criminal convictions. They offer coverage but at a much higher premium.
The following steps will help you find the right insurer and seal an excellent deal:
For an ordinary driver with no criminal conviction background, it might be okay to do lackluster shopping. But not for someone with a criminal conviction. Due to the tainted past, you are marked for denial of coverage or hiked auto insurance premiums. Therefore you should double your research on auto insurance companies and the rates.
But it may be difficult for you to perform such extensive research. Consider reaching out to an independent insurance broker. A broker who specializes in such cases is excellent. They would have referrals and invaluable counsel at their fingertips.
Once you have identified a company to work with, be honest and transparent about your past. Although insurers have their ways of performing background checks, they want to see whether you will be upfront and candid.
Most of the information about your background is captured during the application process. Being honest about it makes it easier to negotiate.
Besides, you have to disclose any material information that may influence your risk assessment. Keeping silent could cause the insurer to decline to offer coverage.
Lower your coverage
Consider dropping comprehensive coverage. It is not a legal requirement. But it is a requirement for financed vehicles.
Many auto insurance companies package comprehensive and collision coverage as a bundle. They require clients to buy both, not one or the other. According to Nerdwallet, this translates to an annual premium cost of about $168 and deductibles ranging from $500 to $1,500.
Consider the age, mileage, and value of your car. If the value nears the premium plus the deductible, you may not require comprehensive or collision coverage. But be on the safe side. Set aside an emergency fund to repair or replace the vehicle if damaged. If you own a high-end car, consider selling and buying a low-cost coverage car and transfer the insurance cover.
Take a state-certified driving class
Taking a driving class does not mean that you are not a competent driver. It enhances your skills and puts you in the good books of insurers. Many auto insurers give special discounts to certified “safe drivers” since they have a lower risk.
Besides, as a safe driver, you can consider putting your money where your skills are. Consider raising your deductible. The insurer could translate it as a significant reduction in risk and respond with a commensurate trimming of premiums.
How long does a criminal conviction affect your driving record?
Minor offenses like traffic warnings will not turn up on your driving record. However, if the conviction was for a civil infraction, it will appear on your files. For example, offenses such as a speeding ticket will stay on your record for about two to five years. A misdemeanor or felony, on the other hand, is indelible. It would hang on forever. Offenses like insurance fraud, DUI, or hit and run will always appear on your driving record when an insurer checks your background.
If you have a criminal conviction in your background, brace yourself for higher premiums on your car insurance. But the mistakes of your past should not deny you the opportunity to enjoy affordable auto insurance. This guide will help you identify prospective auto insurers, demonstrate you are a low-risk driver, and significantly lower your premiums.