Legal definition of assigned risk
Insurance Litigation Legal Terminology
Assigned risk means a driver of a motor vehicle, or a class of such drivers, who would be denied insurance coverage by insurance companies, but are required to be covered under U.S. state law.
Young drivers and drivers with poor driving record are undesirable customers for insurance companies. But most states have some kind of assigned risk plan to assure that you can get coverage. The cost of insurance under the assigned risk plan may be high, but the plan must accept you. Over the years, the auto insurance industry has found ways to absorb most high-risk drivers into its ranks through "nonstandard policies," where you pay a high premium but secure the liability insurance you must have by law to drive.
The term assigned risk is also used in Workers' compensation law.
Each state has its own eligibility rules for its assigned-risk pool, but typically you must have been declined for a car insurance policy or offered a policy at a rate higher than the pool's premiums within the last 60 days. (Source: Insurance Information Institute)
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