Assigned Risk

What Does Assigned Risk Mean?

An assigned risk is a risk that a state government designates to a group of insurance companies. These are typically risks that insurance providers would not voluntarily assume.

Insuranceopedia Explains Assigned Risk

To better understand assigned risks, imagine a group of drivers with poor driving records. Most insurers would refuse to provide them with auto insurance coverage due to the high risks and the likelihood of claims being filed. However, if the state deems it necessary for these drivers to have insurance, it may require auto insurers to cover this risk. Since it is mandated by state law, this would be considered an assigned risk.

Drivers in an assigned risk pool usually pay much higher premiums than they would on the regular market, and many are also required to file an SR-22 form with their state to prove they carry the minimum coverage. Before settling for a pool policy, it is worth checking the best car insurance companies directly, since some still write policies for drivers with accidents or violations on their record. If the goal is just to meet state requirements at the lowest price, a cheap liability-only policy from the standard market is often less expensive than what the assigned risk pool charges.