JUA stands for Joint Underwriting Association. Some states have created a Joint Underwriting Association, which will insure drivers who cannot secure car insurance from an insurer on their own, usually high-risk drivers.
Instead of having a JUA set up in other states, there is an assigned risk pool. This is to ensure all motorists can find insurance even if they have a bad driving record, many claims, etc., that keeps them from finding car insurance in what is known as the voluntary insurance market.
Voluntary insurance is when you can obtain an auto insurance policy by shopping around for an insurer on your own. You may have difficulty acquiring insurance through this regular voluntary market if considered high-risk.
Most states’ insurance regulators work with the insurance industry to make it possible for high-risk drivers to acquire the required car insurance so that motorists aren’t uninsured. Special insurance plans set up by various states can be JUA, residual, shared, ceded, assigned risk or involuntary markets.
Premium rates for a policy through an assigned risk or JUA insurer will be more expensive than policies obtained through a voluntary insurer. This is due to the fact that those unable to obtain insurance through the voluntary market are usually high-risk drivers and thus will pay more than those categorized as good, safe drivers.
For examples of some states’ assigned risk plans see below.
California high-risk driver pool
If you cannot find a company to insure you in California, you can get liability coverage through the California Automobile Assigned Risk Plan (CAARP). This plan is designed for drivers who do not qualify as good drivers and are unsuccessful in obtaining insurance from non-standard or approved surplus lines insurance companies.
The plan works by assigning your application to an insurance company. All insurance companies licensed in the state must accept CAARP applicants. The amount of CAARP assignments are based on the insurance company’s market share. The more automobile policies an insurance company issues, the larger the portion of CAARP assignments they must take.
The rates used by the plan are the same no matter what insurance company issues the policy. The plan also offers installment options. After three years with a clean driving record, consumers underwritten through CAARP can move from the program to a standard lines insurance company. No broker’s fee can be charged in connection with a CAARP policy.
New York high-risk driver pool
In New York if you cannot find an auto insurance company that will sell you an auto policy with the required coverages you need or want, the New York Automobile Insurance Plan (NYAIP), commonly known as the Auto Plan or Assigned Risk Plan, is a special insurance facility established under New York State law to assure that coverages are provided.
When an application is submitted through the NYS Auto Plan, it will be assigned to a particular insurer among many auto insurers doing business in New York State. The premium for an auto plan policy should be the same regardless of the insurer to which your application is assigned and no matter what agent or broker handles your application.
In the event that your auto insurance coverage is written through the Auto Plan, the insurer issuing your policy must insure you for three years before it can non-renew your policy (unless it wishes to write the renewal on a voluntary basis).
You may shop for a voluntary market policy or re-apply to the Auto Plan at the end of these three years. However, there is no requirement for you to remain in the Auto Plan, and usually, you will be better off in the voluntary market. If at any time, you can find an insurer in the voluntary market that is willing to cover you, you may terminate your coverage with the Auto Plan insurer and obtain coverage from the new company.
The voluntary auto insurance market in New York is competitive and affords coverage to those consumers an insurance company believes it can insure at a reasonable profit. Historically, most auto insurers wrote a business that was either preferred (better than average) or standard (average).
There are a number of insurers in NYS that specialize in insuring drivers who previously would not have found coverage outside of the Auto Plan (nonstandard), due to one or more underwriting factors (driving record, age of vehicle, being a newly licensed driver, etc.). However, as a last resort, the residual market (the Auto Plan) remains available to cover consumers who have declined coverage in the voluntary market.
Premiums for those going through the JUA or an assigned risk plan to get auto insurance coverage are generally higher because the overall loss experience for this group of drivers has been consistently worse than the voluntary market. However, under the assigned risk plan, you can get some discounts in some states. For instance, under the New York Auto Plan rules, drivers are eligible for a “careful driver” discount if they are accident-free and conviction free for at least one year in the Auto Plan and have at least four years of experience as a licensed driver.
Some insurance companies specialize in the non-standard auto market for what they consider to be high-risk drivers. If you decide to buy in one of these markets, shop carefully because eligibility requirements and rates vary.
If you have a hard time finding auto insurance due to your driving record, lack of driving experience, then you may need to apply for an assigned risk plan offered by your state or go through the JUA if that is offered instead.
You can contact your state’s insurance regulator for more information about JUA or assigned risk plans in your state.
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