Some drivers cannot obtain coverage in the voluntary market. An assigned risk plan is a state-mandated program that distributes high-risk applicants among licensed insurers so that coverage remains available. Each insurer must accept a share of these risks proportional to its voluntary writings.

Applicants usually reach the plan after being declined by several companies. Premiums are higher than voluntary rates and are set by a governing committee or regulator. The plan typically provides only the minimum liability limits required by law.

Assigned risk mechanisms prevent residual markets from collapsing while giving insurers a predictable method of sharing the burden. Many jurisdictions have refined or replaced pure assignment systems with joint underwriting associations or reinsurance facilities, yet the core purpose—guaranteed access—remains the same.

• Program that allocates high-risk insureds among insurers
• Mandated by state regulation
• Provides minimum required coverage
• Premiums exceed voluntary-market rates