Here’s how coronavirus could impact your home and auto insurance.
What is SR-22?
An SR-22, also known as a statement of responsibility or certificate of financial responsibility, is a document required by many states in the U.S. to prove an automobile owner has high-risk liability insurance. They are typically mandated for drivers who have been involved in major accidents or moving violations or have been caught driving without insurance. SR-22s are issued by an insurance company and kept on file at a state department of motor vehicles (DMV).
States have varying laws and guidelines that specify who needs to obtain an SR-22. A state DMV or a court mandates an SR-22 for drivers who have had serious traffic violations, suggesting they are a greater risk on the road. Behaviors that can lead to an SR-22 order include:
- Inability to pay for damages resulting from a car accident.
- Driving while under the influence of alcohol or drugs.
- Driving without insurance.
- A record of repeated major traffic violations.
- Driving with a revoked or suspended license.
If a court mandates the SR-22, the judge explains it in the ruling and includes it in the court document showing the order. The state DMV sends an official notice via mail to drivers who require an SR-22. The insurance carrier charges a nominal fee for this service that ranges from $15 to $25, but some states allow for higher charges.
Since people required to file an SR-22 are deemed at-risk drivers, they may find it more difficult to get insurance. Some insurance companies do not offer policies to drivers who need an SR-22. Others charge higher premiums to insure these individuals or do not offer good-driver discounts to them.
The duration of an SR-22 mandate varies from state to state, but three years is the most common requirement period. In many cases, drivers must maintain continuous insurance coverage during this time period, even if they don’t own a vehicles.
Delaware, Kentucky, Minnesota, New Mexico, New York, North Carolina, Oklahoma, and Pennsylvania do not have SR-22 filing requirements. Individuals who move to one of these states may still need to file an SR-22 with their previous state to show they meet the requirement.
To get an SR-22, you first must have car insurance that meets the state’s minimum liability requirements. Then, you must speak with your insurance agent or company representative and explain that you need an SR-22. He or she will file the document with the DMV.
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A driver who has been convicted of a DUI will typically also require an SR-22 for three to five years. Once the driver finds an insurance company to provide coverage, it files the SR-22 on the driver’s behalf for a one-time filing fee of between $15 and $50. Auto insurance policies associated with an SR-22 do not carry special premiums, and are calculated according to standard factors: driving record, geographical location, type of vehicle. Now that our driver has a DUI on the record, his premiums will rise, regardless of an SR-22 order.