In the aftermath of a conviction for DUI, DWI or driving without insurance, you may be required to carry an SR-22 (also known as a "certificate of financial responsibility") as a condition of maintaining your driving privileges. Having an SR-22 on file can bring quite a few changes to your current auto insurance policy. The following highlights these changes and explains how they can affect your insurance.
You May End Up Paying Higher Premiums
One disadvantage of having an SR-22 is that you'll end of paying more for your auto insurance coverage. This is because insurance providers are always taking a close look at your driving record. A clean driving record equals lower rates and even a few discounts, while having multiple driving infractions often means paying higher rates for the same coverage.
Having an SR-22 on record could tag you as a "high-risk driver" in the eyes of your insurance provider. Since insurance providers expect high-risk drivers to file more frequent claims, providers usually respond to this greater likelihood by charging more for their coverage. As a result, you'll wind up paying more for your insurance while your SR-22 remains on file with your state's DMV and your insurance provider.
So how much more can you expect to pay for your insurance coverage with an SR-22? A recent analysis found that drivers with one moving violation saw an 18 percent increase in their rates when compared to drivers with clean driving records.
Even after fulfilling the requirements of your SR-22, you could still end up paying hundreds of dollars more for your insurance. Fortunately, a few years of establishing a clean driving record after your SR-22 can help bring those premiums back down to reasonable levels.
You Could Lose Your Coverage Altogether
Getting dumped by your current insurer is always a possibility if you have an SR-22. While most insurers deal with elevated risk through rate increases, others may take things a step further and decline to renew your existing coverage at the end of the coverage period. Some insurance providers may even refuse to accept your SR-22, leaving you to seek alternative insurance options.
Fortunately, most insurance providers will give you advance notice if they decline to continue your coverage. This will give you an opportunity to secure alternative coverage with another provider before your policy lapses.
Canceling Your Coverage Could Restart the Clock
Most states require you to maintain your current insurance coverage for 3 consecutive years if you have an SR-22. But while most drivers won't have a problem with keeping the same policy with the same insurer for this amount of time, it could prove a stumbling block if you want to shop around and eventually switch to another insurance provider.
If you decide to cancel your coverage or allow your policy to expire, it could effectively restart the clock on how long you must maintain your SR-22. Even if you're only days away from fulfilling the time requirements, a lapse in coverage could mean going back to square one. Unfortunately, most states will not credit you for any non-consecutive time you've had with an SR-22.
You may be able to avoid being penalized for not having insurance by setting up a new policy why your old policy is still in effect. This way, you won't have any gaps in coverage while you're having your SR-22 processed by your new insurer.
The Bottom Line
Having an SR-22 is no picnic, but it's a necessary step towards moving past any serious driving conviction. Not only will you end up paying higher premiums, but you may even be forced to change providers if your current insurer refuses to accept your SR-22. Fortunately, fulfilling all of the requirements of your SR-22 means that you'll be able to enjoy lower rates and better coverage options in the near future.
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