Car insurance can be a tricky business, but here I explain everything you need to know about proof of insurance – the most important document with regards to auto insurance. Not only does proof of insurance prove that you meet your state's requirements for auto insurance but also your financial responsibility – i.e. that you can pay for any damages (both to properties and physical injuries) that you may cause with your vehicle.
In This Proof Of Insurance Guide:
What information is on your proof of insurance?
Your proof of insurance includes the insured's name and address as well as information on the insured vehicle such as year and make. Insurance policy information includes renewal dates, company name and policy number.
Different forms of proof of insurance
Most people choose to cover their financial responsibility (also referred to as financial liability) through an insurance policy, in which case the insurance company will send you a card as proof of insurance, also known as an insurance identification card or a binder.
In certain states and circumstances you may choose not to purchase a standard insurance policy, and in this case your other two options are:
1. Arranging a bond with a surety company approved in your state (every state is different and this option does not exist in many states, make sure you research yours first). The company will act as a guarantor, assuming responsibility for the debt if necessary but beware, there are many stipulations with surety bonds, meaning that this option is often only beneficial to businesses with fleets of vehicles.
2. Making a large state deposit with the state treasurer, from $25,000 upwards – again this depends on your state, research yours to see if this option is valid.
In either case a certificate of your bond or deposit will be issued, and this should be kept with you as proof of insurance.
Who wants to see your proof of insurance?
You must present your proof of insurance in the following situations:
When renewing your license plate you must show your proof of insurance to the Secretary of State.
When a police officer asks you to do so – if you are pulled over, police officers will ask you for this. If you don't have your proof of insurance with you this results in a (usually large) fine.
After an accident. The claimant will need the information on your proof of insurance to file their claim and also a police report.
What happens if you don't have proof of insurance?
If you don't have proof of insurance not only can you be fined but also face registration and license suspension, and even a jail sentence. If this happens before reinstating your registration or license new proof of insurance needs to be obtained and this comes in the form of an SR-22 a document proving you have insurance that meets at least the minimum liability requirements of your state.
Proof of insurance is absolutely vital. In most cases, it is easiest to get this from an insurance company when registering, but deciding which insurance company to choose out of the hundreds available can be tough work. To help you find the cheapest auto insurance rates we strongly recommend shopping around – here at GET.com you can find the best auto insurance rates in a click by selecting your state from the box below.
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