Assigned-risk plans: car insurance when insurers say no

What the residual market is

The regular, or voluntary, market is every insurer choosing whom to cover. The residual market is what the states set up for drivers left over: a mechanism that makes coverage available to anyone legally entitled to it who can't get it through ordinary methods. Insurers writing auto coverage in the state take part, and in an assigned-risk plan the insurer you are assigned to issues the policy.

Many of the plans, from Alabama and Arizona to California and Connecticut, are administered by AIPSO; Massachusetts' plan is run by Commonwealth Automobile Reinsurers under rules the Division of Insurance approves. Your state cost page names your state's plan and how to reach it.

Who qualifies, and how to apply

The plans exist for drivers the market has refused, so most ask for proof that you tried. The rules differ by state:

• Texas: you can buy through TAIPA after being turned down by two insurers.
• Maryland: MAIF takes residents turned down by at least two private insurers; call 800-492-7120.
• Connecticut and Maine: you must certify that you tried and failed to buy insurance in the state within the previous 60 days.
• Illinois: you must certify that you tried and failed to buy Illinois coverage within the previous 60 days, and hold or be eligible for a valid license.
• Massachusetts: companies that turn you down must explain why in writing, and you can't pick the company you are assigned to.

You almost always apply through an agent. In Georgia and Delaware any agent licensed for property and casualty insurance in the state can write plan business; in Illinois only agents and brokers can submit applications; in New York most licensed agents and brokers can place you, or you can call the plan at 212-943-5100. Washington's plan can be contacted directly or through an agent. Ask the agent to quote the plan alongside any non-standard insurers that might take you at higher premiums, which Georgia's insurance office names as the other option.

What the coverage includes, and what it costs

Plan coverage starts with what the law requires and doesn't always go much further:

• Texas: liability, PIP and uninsured motorist coverage, but not collision or comprehensive.
• New York: the legal minimums, with optional bodily injury liability up to 250/500, property damage liability up to $100,000, and collision and comprehensive up to $50,000.
• Maine: bodily injury and property damage liability, medical payments and physical damage coverage.
• Maryland: the state's comparison guide prices MAIF at the 30/60/15 minimum and at 100/300/100.
• North Carolina: the Facility reinsures standard coverages including bodily injury and property damage liability, medical payments and uninsured and underinsured motorist coverage.

On price, regulators are consistent: expect to pay more. Texas says TAIPA rates are higher than the regular market's, with surcharges for tickets and accidents, and New York's Department of Financial Services warns that Auto Plan premiums are generally higher. Massachusetts softens it: plan rates are filed and approved and generally higher than a company's regular rates, but the assigned company compares its own voluntary rate for you with the plan rate and charges the lower one.

If you need collision coverage for a financed car and the plan doesn't offer it, ask the agent about other routes before you sign a loan or lease. Our page on driving record explains which offenses weigh most on a price.

Where an SR-22 fits in

An SR-22 is not a type of insurance. It is a certificate your insurer files with the state to prove you carry the required liability coverage, and states demand it after certain offenses. Needing one doesn't by itself put you in the plan, but the record behind it can make regular insurers say no.

• New Hampshire, which doesn't require insurance for most drivers, may require proof on an SR-22 after any DWI, after leaving the scene of an accident or after a second reckless operation offense.
• Virginia requires an SR-22 filing for three years to reinstate a license and registration suspended for driving an uninsured vehicle.
• Florida doesn't require bodily injury liability of most drivers, but a driver who must file an SR-22 to get a license back has to certify bodily injury and property damage liability.

Getting back to the regular market

Plans are built as a bridge. In New York, the insurer that issues your plan policy must keep you for three years before it can non-renew, and the Department of Financial Services says you will usually be better off in the voluntary market once you can get a policy there. In Texas, the Department of Insurance says that after three years in TAIPA without tickets or accidents, your insurer must offer you a policy outside the plan at a lower price.

1. 1 Keep coverage continuous while you are in the plan. A gap on top of a poor record makes the next step harder.
2. 2 Note when each ticket, accident or conviction stops counting in your state, and set a reminder for that date.
3. 3 Ask for regular-market quotes at each plan renewal and when an item ages off, then compare them line by line with the plan price.
4. 4 Switch without a gap when a regular insurer accepts you; see switching insurers without a gap.

Questions drivers ask