State-owned high-risk auto insurance is car insurance distributed by a state government to high-risk drivers who cannot find coverage elsewhere. Maryland is currently the only state that offers high-risk auto insurance directly to drivers through a state-funded system. All other states have programs designed to help high-risk drivers receive auto insurance through private insurers.
Since almost every state requires drivers to carry auto insurance, these programs ensure that high-risk drivers can comply with the law while they work to improve their driving records. Although the programs all have the same goal, the specific steps and qualifications required vary depending on the type of system the state adopts.
Types of State-Sponsored High-Risk Auto Insurance Programs
The Maryland Auto Insurance Fund (MAIF)
Maryland’s high-risk program is unique because it provides coverage directly to drivers through a network of authorized insurance agents who write policies on behalf of the program.
Assigns high-risk drivers to private insurance companies that are then required to provide coverage. This is the type of program available in most states.
Requires all auto insurance companies operating in the state to share the premiums, profits and losses connected to especially high-risk drivers. Florida, Hawaii, Michigan and Missouri use this system.
Allows auto insurance companies to pass high-risk policies to a larger collective that distributes the premiums and expenses. New Hampshire and North Carolina are the only states where this system is available.
Although state high-risk auto insurance programs are valuable resources for drivers who can’t find coverage elsewhere, they will leave you paying a high premium for the bare minimum amount of coverage required by state law. Depending on the reason why you’re a high-risk driver, you may need to remain in your state’s program for two or more years while you demonstrate that you can be a responsible driver.
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