Voluntary Car Insurance Rates

Reader’s Question:

What is the difference between ceded and voluntary car insurance rates?

Holly

Las Vegas, NV

Voluntary insurance is when you are able to get a car insurance policy by shopping around for an insurance company on your own. If you are considered high risk you may have difficulty getting insurance through this regular voluntary market.

Most states’ insurance regulators work the insurance industry to make it possible for high risk motorist to get the required auto insurance, so that the driver does not drive around uninsured. Special insurance plans set up by different states can be known as shared, residual, ceded or involuntary markets.

Insurance rates for a policy through a ceded insurance company will normally be higher than policies that are acquired through a voluntary insurance company. This is due to the fact that those unable to get insurance through the voluntary market are usually high risk motorists and thus will pay more than those categorized as a good, safe motorist.