Saturday, November 2, 2013

The SR-22 car insurance form: When you have to prove you have auto insurance.

All states require drivers to buy auto insurance (with the exception of New Hampshire), and of course not everyone complies. But if you’re caught, you may find yourself required to have an SR-22, says Alex Hageli, director of personal lines policy with the Property Casualty Insurers Association America, an industry trade group.

The SR-22 form, also called a Certificate of Financial Responsibility (CFR), is a financial responsibility document that car insurance companies file with the state for customers who are required to prove they have insurance.

Rules on SR-22s vary by state, but usually it's legally required for drivers that have been convicted of certain driving-related violations. Examples include DUI convictions, reckless driving and accidents caused by uninsured drivers.

How to get an SR-22 insurance form


If you need an SR-22, the court or your state department of motor vehicles will notify you of the requirement, says Loretta L. Worters, vice president of the Insurance information Institute. "A person should notify the insurer providing his or her insurance that an SR-22 is needed," Worters says. "Once the [insurance] purchase is completed, the insurer will begin the process of filing the certificate on the behalf of the policyholder."

According to Worters, Delaware, Kentucky, Minnesota, New Mexico, Oklahoma and Pennsylvania don't require SR-22s. But if you already have an SR-22 and move to one of those states, you must continue to meet the requirements of the SR-22 state where your offense was committed. Also, your insurance policy in your new state must have the liability limit minimums required in your former state, Worters says.

New York and North Carolina don't require SR-22 filings, and if you have an SR-22 and move there, you don’t have to follow your former state’s requirements because most companies don't offer out-of-state SR-22 filings for policies in those states.You’ll generally need to pay a $25 one-time fee to file an SR-22.  You’ll have to pay the fee again if you allow your policy to lapse and the SR-22 has to be re-filed. In addition, a filing fee is charged for each individual SR-22 filed. For example, if you and your spouse need SR-22s, you’ll pay the fee twice, Worters says.

The long SR-22 insurance road ahead


As long as your auto insurance policy remains in force, the SR-22 remains valid. If your policy is cancelled while you're still required to carry an SR-22, your insurer is required to notify the state. Failure to maintain continuous coverage could cause you to lose your driver’s license.

How long the SR-22 filings are required can vary by state and the severity of the offense, but it’s typically three to five years, Worters says.

If you cancel your policy prior to the termination date, your insurance company must file an SR-26 notifying your state you no longer have insurance.

Some insurers can’t be bothered. Also, many auto insurance companies don't want the hassle of filing SR-22s with states -- and also filing SR-26s when policies lapse, Hageli says. "And there are companies that decide that people who require SR-22s are not the type that fits their profile of someone they will underwrite."

The SR-22 will affect both your choice of insurance companies and the car insurance rates you’ll pay, now and in the future. You’ll likely be moved into a higher risk category and pay more for insurance due to your violation. "Some companies review rates on a case-by-case basis, looking at factors such as age, gender, driving history and vehicle model," Worters says. "It's possible that your insurance company will never find out about your DUI conviction if your state doesn't require you seek an SR-22." If your insurance company misses the conviction at the time it happens, however, it may still have a few years to raise rates if it discovers the DUI later.

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