Assigned Risk

What Does Assigned Risk Mean?

An assigned risk is a risk that a state government designates to a group of insurance companies. These are typically risks that insurance providers would not voluntarily assume.

Insuranceopedia Explains Assigned Risk

To better understand assigned risks, imagine a group of drivers with poor driving records. Most insurers would refuse to provide them with auto insurance coverage due to the high risks and the likelihood of claims being filed. However, if the state deems it necessary for these drivers to have insurance, it may require auto insurers to cover this risk. Since it is mandated by state law, this would be considered an assigned risk.