Do assigned risk drivers pay higher premiums than other drivers?

Assigned risk drivers are individuals who are considered higher risk due to factors such as a poor driving record, lack of insurance history, or other circumstances that make them difficult to insure. As a result, insurance companies categorize these drivers as more likely to file claims, which translates into higher expected costs for the insurance provider.

To mitigate these risks and potential losses, insurers charge assigned risk drivers higher premiums compared to standard drivers—those with better driving histories and less likelihood of filing claims. This ensures that the insurance companies can cover potential losses while still providing coverage to those who might struggle to obtain it through regular channels.

The other options may suggest different scenarios that do not accurately depict the risk assessment that insurers apply when determining premiums. The significant difference in risk profiles between assigned risk drivers and their lower-risk counterparts is the primary reason behind the higher costs.