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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...