If you drive in Oklahoma – the Sooner State – you must have auto insurance to be on the road legally. However, if you have a history of motor vehicle violations or accidents, insurers in the state may choose not to cover you in the “voluntary” market. The term “voluntary” is insurance industry jargon to describe the “regular” insurance market where drivers can obtain a quote easily online insurers voluntarily rate and insure most drivers. Instead, you may still find auto insurance through the Oklahoma Automobile Insurance Plan (OKAIP). This plan will ensure that you receive coverage, as long as you meet the eligibility criteria described below. In Oklahoma, the minimum coverage levels are $25,000 per person/$50,000 per accident for Bodily Injury, and $25,000 per accident for Property Damage.
What is the Oklahoma Automobile Insurance Plan (OK AIP)?
The OK AIP was first implemented in 1950. Its purpose is to extend insurance coverage to as many Oklahoma drivers as possible, especially those who are characterized as high risk. That tends to be the case when drivers have had several accidents or traffic violations under their belt. All insurers must accept high risk drivers in order to do any auto insurance business in the state; this helps to spread the potential losses from high risk drivers across all insurance companies in the state.
High risk drivers are assigned by the OK AIP to existing auto insurance companies based on carriers' market share. So for example, if Farmers Auto Insurance has 14% of the total auto insurance market in Oklahoma, then Farmers must cover 14% of the high risk drivers assigned through the OK AIP. There aren’t many drivers in the plan currently, as insurers have become better over the years at evaluating and pricing high risk drivers competitively in the standard market.
Every licensed insurance agent and broker in Oklahoma can explain your options for coverage through the OK AIP, if this is where you land.
Oklahoma AIP Eligibility
In order to apply for insurance coverage through the OK AIP, you must state on your application that you have tried and failed to find coverage in the voluntary market within the last 60 days. If that’s the case, then you are eligible for coverage as long as you have a valid driver’s license and a car registered in Oklahoma. It’s important to fill out the insurance application accurately. If your insurer discovers that you’ve misrepresented some information, then your insurance policy may be canceled.
You may be ineligible for coverage - even through the OK AIP - if your record shows an unpaid insurance premium any time in the last 12 months. You may be denied Physical Damage coverage for your car if it’s an antique (older than 25 years) or if it cost more than $40,000 brand new. Physical Damage coverage requires you to present your car for inspection within 10 days of receiving your policy, and if you don’t, that part of your coverage will be cancelled. The good news is, if you pay your insurance bill and/or bring your car for inspection to the authorized insurance representative, you can apply through the OK AIP immediately.
Oklahoma AIP Coverage
The Oklahoma Auto Insurance Plan offers pretty much the same coverages that safer drivers purchase – the coverage may just cost you more. That’s because – based on the claims history of millions of drivers over the years – drivers in the Plan tend to file more claims than average.
Once the Plan has assigned you an insurer, your coverage will continue for 3 years. This is a great time to improve your driving record so that you may qualify for better insurance rates in Oklahoma’s voluntary insurance market. If you remain in the “high risk” pool at the end of 3 years, you may re-apply to the Plan, and if you are still eligible, you will be covered again, albeit perhaps by a different insurer.
The table below shows both the Oklahoma required minimum coverage limits - which is the lowest coverage amounts you can purchase through the OK AIP - as well as higher limits and other types of coverage. Your insurer MUST offer you coverage against Uninsured or Underinsured Motorists, but you can reject that coverage by checking a box on the application. Medical payments coverage pays your medical bills regardless of who is at fault in an accident. But be sure this coverage doesn’t duplicate coverage you may already have through your health insurance.
|Mandatory Coverage||Oklahoma Required Min. Limits||OK AIP Max. Limits|
|Bodily Injury (BI)||$25,000 per person/$50,000 per accident||$100,000 per person/$300,000 per accident|
|Property Damage (PD)||$25,000 per accident||$50,000 per accident|
In Oklahoma, if you want Collision Coverage, you MUST buy Comprehensive Coverage as well. This is very much at the discretion of your insurer. Physical Damage coverage comes with the following choice of deductibles: $100, $200, $250, or $500. Usually, the higher your deductible is, the lower your premium for Physical Damage coverage is (read more about how deductible affects your premiums here). Oklahoma requires a safety inspection of your vehicle prior to providing such coverage. The most your insurer will pay for Physical Damage is the “actual cash value” of your car – should you try to sell it in the open market – up to a maximum of $40,000.
|Optional Coverage||OK AIP Min. Limits||OK AIP Max. Limits|
|Uninsured Motorist Bodily Injury||$25,000 per person/$50,000 per accident||$100,000 per person/$300,000 per accident|
|Physical Damage (Collision and Comprehensive)||actual cash value||actual cash value up to $40,000|
|Medical Payments||$1,000 per person per accident||$5,000 per person per accident|
OAIP Premiums and Payments
If you are assigned an insurer through the OK AIP, your premiums are likely to be higher than what the average safer driver pays. However, there is no simple formula for knowing how MUCH higher they might be. Generally speaking, the same factors that make you a higher-risk driver will be what drive your premiums higher than other motorists, even through the OK AIP.
You have a couple of options to pay your Oklahoma Automobile Insurance Plan premium. The first is to pay the entire annual premium at the time you fill out your application. Your insurance agent can price the coverages you choose and send the entire amount to the OK AIP up front. The second is to pay a deposit of 30% of the annual premium with your application, and the entire balance of the premium within 30 days. The third way to pay is an installment plan. This involves paying 40% of the entire annual premium up front. You will receive a bill for 30% of the annual premium 3 months after that. And a bill for the final 30% of the premium 6 months after your policy begins.
In the happy event that you find auto insurance coverage in the voluntary market, you may switch at any time without penalty. Just inform your assigned insurer of who the new insurer is, and your assigned insurer will refund any premiums to you on a prorated basis.
How to Apply for Insurance through the Oklahoma Automobile Insurance Plan
If you have been rejected for auto insurance coverage in Oklahoma, you can ask any insurance agent in the state about the OK AIP. For more information about the Plan, call the Oklahoma Insurance Department’s Consumer Assistance hotline at 1-800-522-0071.