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Assigned Risk Auto: What You Need to Know

Assigned Risk Auto: What You Need to Know

In most states, Auto Insurance is mandatory. You cannot register a vehicle without it and if you have it and then lose it, you can lose your drivers license. For businesses, you can also lose important contracts if you do not have auto insurance coverage. For those individuals and businesses that have multiple claims or bad driving records, an Assigned Risk auto insurance policy may be the only option available besides self-insurance (which is another article altogether). Here is what you need to know: Low Cost = Low Coverage Assigned Risk auto insurance plans such as the California Automobile Assigned Risk Plan (CAARP) often bill themselves as “low cost” auto insurers, designed for both high-risk drivers and vehicles and those who cannot afford coverage on the open market. The fact is you get what you pay for. For instance, CAARP offers personal auto limits of $15,000 bodily injury per person; $30,000 bodily injury per accident; and $5,000 property damage (15/30/5) which is the minimum mandatory insurance limits in California. While these limits will satisfy the state, this coverage will most likely not be adequate in the event of an accident. For commercial vehicles, the coverage limit is dependent on the filing requirements for that business. If your business has contracts with general contractors, government agencies or municipalities, higher coverage is usually required, typically $1,000,0000 or more. The assigned risk limit would not be enough. It’s Liability Only Assigned risk coverage typically only covers your personal auto or business needs for liability. Should you require other coverage, you would need to go to an outside market. There is no coverage...
The Basics of the WCJUA

The Basics of the WCJUA

Every state has laws for businesses regarding Workers Compensation insurance. What these regulations don’t take into account is how difficult it is for certain industries to obtain coverage. Fortunately, state labor departments and insurance departments have created Workers Compensation Joint Underwriting Associations (WCJUA) to handle hard-to-place policies. What is the WCJUA? The WCJUA or JUA goes by different names in different states. It may also be called the high risk pool, a residual market or an assigned risk plan. Insurance companies that do business within your state are required to write a certain percentage of high risk customers. These companies may split the risk with other insurance companies contracted to write these businesses. JUAs are heavily regulated by the state and require strict application and underwriting procedures. Because of the typically high risk nature of JUA customers, premiums are higher than in the open market. Who Needs the JUA? A JUA is almost never the first stop for any business, and is usually the insurer of last resort for employers. You may need the JUA if you fit into any of the following categories: High number of high payment claims. High risk industry (for example: roofers, tree trimmers, circus, skydivers, etc.) Chronic premium payment issues. Small number of employees. New business owner with no prior industry experience. Your insurance broker may be required to submit your application to at least three other open market insurers and receive declinations prior to submitting an application to the JUA. What To Expect The WCJUA is much the same as any other workers compensation insurer in that they offer both employers liability coverage...