What is a non standard insurance company

A non-standard insurance company, also known as a non-standard auto insurance company, specializes in providing coverage to high-risk drivers or individuals who may have difficulty obtaining insurance from standard insurance companies due to factors such as a poor driving record, a history of accidents or violations, lack of prior insurance, or other risk factors.

In this article, we’ll explore what non-standard insurance companies are, how they operate, the types of customers they serve, and the benefits and challenges associated with non-standard insurance.

Understanding Non-Standard Insurance Companies

Non-standard insurance companies fill a specific niche within the insurance industry by offering coverage to drivers who are considered high-risk or have unique insurance needs. These companies cater to individuals who may have:

Poor Driving Record: High-risk drivers with a history of traffic violations, accidents, DUI convictions, or license suspensions often find it challenging to obtain insurance from standard insurance companies.

Lapse in Coverage: Individuals who have had a lapse in insurance coverage, either due to non-payment or other reasons, may also be classified as high-risk and require non-standard insurance.

Young or Inexperienced Drivers: Teenage drivers or individuals with limited driving experience may face higher insurance rates and may need non-standard insurance until they establish a more favorable driving history.

Non-Standard Vehicles: Some non-standard insurance companies also specialize in insuring non-standard vehicles such as classic cars, modified vehicles, or recreational vehicles (RVs).

How Non-Standard Insurance Companies Operate

Non-standard insurance companies operate differently from standard insurance companies in several ways:

Underwriting Criteria: Non-standard insurers have more lenient underwriting criteria compared to standard insurers. They may accept applicants with a history of accidents or violations that would typically result in denial from a standard insurer.

Higher Premiums: Since non-standard insurers assume a higher level of risk by insuring high-risk drivers, they often charge higher premiums to offset the increased likelihood of claims.

Limited Coverage Options: Non-standard insurance policies may offer fewer coverage options or lower coverage limits compared to standard policies. This helps keep premiums manageable for high-risk drivers.

Specialized Policies: Some non-standard insurers offer specialized policies tailored to specific needs, such as SR-22 insurance for drivers who need to demonstrate financial responsibility after a serious violation.

Flexible Payment Options: Non-standard insurers may offer flexible payment options, including monthly installments, to accommodate customers who may have budget constraints.

Types of Customers Served by Non-Standard Insurance Companies

Non-standard insurance companies typically serve the following types of customers:

High-Risk Drivers: Individuals with a history of accidents, violations, DUI convictions, or other risk factors that make them ineligible for standard insurance coverage.

Uninsured or Underinsured Drivers: Non-standard insurers may also provide coverage to uninsured or underinsured drivers who are unable to obtain coverage through traditional channels.

Non-Standard Vehicles: Customers who own non-standard vehicles, such as classic cars, modified vehicles, or RVs, may seek coverage from non-standard insurance companies specializing in these types of vehicles.

Young or Inexperienced Drivers: Teenage drivers or individuals with limited driving experience may turn to non-standard insurers until they establish a more favorable driving record.

Benefits of Non-Standard Insurance

Despite the higher premiums and limited coverage options, non-standard insurance companies offer several benefits to high-risk drivers:

Access to Coverage: Non-standard insurers provide an option for individuals who may otherwise struggle to find insurance coverage due to their high-risk status.

Compliance with State Laws: For drivers who require SR-22 insurance or other forms of proof of financial responsibility, non-standard insurers can fulfill these requirements.

Flexible Payment Options: Many non-standard insurers offer flexible payment plans, allowing customers to spread out their insurance costs over time.

Specialized Policies: Non-standard insurers may offer specialized policies tailored to specific needs, such as roadside assistance, rental car coverage, or custom equipment coverage for non-standard vehicles.

Challenges of Non-Standard Insurance

While non-standard insurance provides a valuable service, it also comes with challenges for both insurers and policyholders:

Higher Premiums: High-risk drivers can expect to pay significantly higher premiums for non-standard insurance compared to standard coverage, which can strain their budget.

Limited Coverage Options: Non-standard policies may have limitations on coverage options or lower coverage limits, leaving policyholders with less comprehensive protection.

Risk Management: Non-standard insurers must carefully manage risk to avoid excessive claims and maintain financial stability in a high-risk market.

Regulatory Compliance: Non-standard insurers must comply with state insurance regulations, including pricing guidelines and solvency requirements, while serving high-risk customers.

Choosing the Right Non-Standard Insurance Company

When selecting a non-standard insurance company, high-risk drivers should consider the following factors:

Financial Stability: Choose an insurer with a strong financial rating to ensure they can meet their obligations and pay claims promptly.

Coverage Options: Review the available coverage options to ensure they meet your needs and provide adequate protection.

Customer Service: Evaluate the insurer’s customer service reputation, including claims handling processes, responsiveness, and overall customer satisfaction.

Cost: While non-standard insurance is generally more expensive, compare quotes from multiple insurers to find the most competitive rates for your situation.

Policy Terms: Understand the terms and conditions of the policy, including deductibles, coverage limits, exclusions, and any additional fees or charges.


Non-standard insurance companies play a vital role in providing coverage to high-risk drivers and individuals with unique insurance needs. While they offer access to insurance for those who may struggle to obtain coverage from standard insurers, non-standard insurance comes with higher premiums, limited coverage options, and other challenges. By understanding how non-standard insurance works, assessing their specific insurance needs, and choosing a reputable insurer, high-risk drivers can find suitable coverage that meets their requirements and budget.

Leave a Comment