What Classifies High Risk?
At Competitive Edge, we specialize in high-risk insurance. We often get the question, “What is high-risk insurance, and how do I know if I need it?”
Well, the answer is, if you’re a small business owner, general contractor, or even car owner, you likely need high-risk insurance. Depending on the industry you’re in, however, it can be difficult to fund coverage or losses.
There are a couple of ways to identify what classifies high-risk insurance.
Investopedia defines risk class as, “A group of individuals or companies that have similar characteristics, which are used to determine the risk associated with underwriting a new policy and the premium that should be charged for coverage.”
There are some main points that are needed to understand the risk that is associated with coverage:
- “An insurance risk class is a way for insurers to underwrite policies based on one’s belonging to a particular risk group.
- People in each risk group will generally share similar characteristics that help insurers better estimate the chances that the policyholder will file a claim
- Riskier risk groups will pay higher premiums—for example, people who are sick, older, or have a poor driving record.”
Once you determine if you qualify for high-risk insurance, there are additional factors that will determine your premium. These might include:
- Amount of coverage
- Number of years the coverage is guaranteed
- Risk class
- And more!
One example of a scenario of hard-to-place insurance is from our very own founder, Brenda Jo Robyn of Competitive Edge Insurance. Brenda Jo had to pay an extra $15,000 in order to get her directors on board for her project.
If you have had excessive losses, shock loss, or are a startup (tech and service), it can be challenging to get professional liability coverage. There are, in fact, some extreme costs associated with high-risk coverage.
So, even the professionals have dealt with the difficulties and hoops that surround high-risk insurance (trust us, we get how frustrating it can be to navigate). That’s also why we’re here to help!
Contact Us Today!
Competitive Edge Insurance can help you perform a comprehensive review of all your risk exposure.
Reach out today for more information from our experts on high-risk insurance!