Drivers are not usually placed on assigned risk after just one accident but are done so if they have a bad driving record or a number of accidents. The Department of Insurance (DOI) for California defines an assigned risk as a driver who is not acceptable to a standard lines insurance company due to a poor driving record and then to obtain insurance is assigned to an insurance company participating in the assigned risk pool. All insurance companies licensed to sell auto insurance in California agree to accept a share of high-risk drivers based on the percentage of auto policies they issue in the state.

If you cannot find a company that will insure you, you can get liability coverage through the California Automobile Assigned Risk Plan (CAARP). So it is not necessarily that you are placed under the assigned risk plan in CA but that depending upon your driving record, claims history, etc you may not be insurable by the voluntary / standard market and thus must turn to the CAARP to get insurance when no one else will insure you do to the high risk insurance companies see in you as a driver.

The California DOI notes that some insurance companies specialize in the non-standard auto market for what they consider to be high-risk drivers. Should you decide to buy in one of these markets, be sure to shop carefully because eligibility requirements and rates vary. So you can shop around for insurance companies that voluntary take on high risk drivers and see if you can get a policy this way first.

The assigned risk plan in CA is designed for drivers who do not qualify as good drivers and are unsuccessful in obtaining insurance from non-standard or approved surplus lines insurance companies. To apply for the plan, find a CAARP certified insurance agent or call CAARP direct at 1-800-622-0954.

The plan works by taking your application and assigning it to an insurance company. All insurance companies licensed in the state must accept CAARP applicants. The amount of CAARP assignments is based on insurance company market share. The more automobile policies an insurance company issues, the larger the portion of CAARP assignments they are required to take.

The rates used by the plan are the same no matter what insurance company issues the policy. The plan also offers installment options. After three years with a clean driving record, consumers underwritten through CAARP can move from the program to a standard lines insurance company. No broker’s fee can be charged in connection with a CAARP policy.

The California Assigned Risk Plan is a processing center by which people who have trouble buying automobile insurance are put in touch with an insurance company which will insure them and not an insurance company.

So if you cannot find insurance in the voluntary market you can turn to the CAARP and get insurance this way. After 3 years with a clean driving record you then can move back to the standard/voluntary market. Proving yourself with a clean driving record for the 3 year period will allow you to not be such a high risk to insurers and thus allow you to get better rates.

For more information about the CAARP and when an insurance company can deny you standard insurance and suggest that you use the assigned risk plan to obtain an auto insurance plan contact the CA Department of Insurance.