Understanding Insurance Terminology

SR-22 Insurance: What It Is And What Misconceptions Can Get You In Trouble

5 November 2015 by Vilma Maki

If you have recently been pulled over for a traffic violation, particularly a DUI or a DWI, auto insurance companies may place you in a high-risk category. If you have a history of traffic violations, your chances of obtaining affordable insurance can decrease. High-risk drivers such as yourself may be required to carry SR-22 insurance. Knowing what SR-22 insurance is and what misconceptions to avoid can help keep you out of trouble.

Understanding SR-22 Insurance

It is important to keep in mind that one common misconception is that SR-22 insurance is actual car insurance, but that is not the case. Instead, it is a certificate that shows that you meet your state's current minimum insurance requirements.

The insurance provider sends the certificate to the state in order to prove you have insurance. If you happen to cancel your insurance, the company will send a separate file to the state letting them know that you no longer have insurance.

If you are required to carry SR-22 insurance because you are considered a high-risk driver, keep in mind that most states require you to maintain it for approximately 3 years. If you are able to maintain a clean driving record for the period that you have your SR-22 insurance, you will once again be eligible to obtain insurance from the normal market.

Knowing the Cost

One of the biggest mistakes people make is assuming that they have to pay outrageous fees simply because they are required to carry SR-22 insurance. Although high-risk drivers do typically pay higher insurance premiums compared to people who are not high risk, you can still shop around.

Do not settle on the first provider that offers you a rate. Instead, compare rates through various companies until you find one that is best suited to your budget. Your rates will still be higher than they would through the general market, but it is possible to avoid paying an arm and a leg.

In some instances, it is possible to obtain a lower rate depending on the reason you are considered high risk. For example, if you are considered high risk simply because you are a young driver who has little to no driving experience, it may be possible for you to obtain a lower rate with a more forgiving company.

Canceling Your Insurance

Do not make the mistake of canceling your policy at the wrong time. For example, you may think that if you no longer own a vehicle you will not have to carry an insurance policy. If the state requires you to obtain SR-22 insurance, you will need to hold it for the minimum amount of time required.

For instance, if the state requires you to carry your policy for three years and you sell your vehicle after only a year and a half, you will need to continue carrying your policy for another year and a half. While it may seem silly to carry a policy when you do not have a vehicle, it is a requirement.

If you cancel your insurance before the required timeline you may have to face certain fines, fees, and legal repercussions. Even if you do not have a vehicle of your own, if you happen to get pulled over while driving a friend or family member's vehicle, you will need to show your SR-22 certificate for insurance.

Fortunately, you can avoid the trouble and legal repercussions that often go along with misconceptions surrounding SR-22 insurance by talking to a professional. A professional can help you find an insurance policy that meets your state's requirements.

Furthermore, a professional can help you understand the terms and requirements laid out by the SR-22 insurance. If you have any questions or are in doubt, always ask a professional. An insurance specialist can let you know how much time you have remaining on your policy to help keep you out of trouble. Try visiting a site like http://www.greatnortherninsuranceagency.com to get in contact with an insurance agent.

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