Insurance and Risk:
Automobile insurance providers have a primary business objective with every driver they insure. That goal is to properly assess the risk that a given motorist will cause a claim filed. All insurance rates reflect that detailed and complex assessment. For certain classes of individuals, the insurance providers assign the term “high risk.” This classification means that the providers believe the driver presents more than normal risk to insure. In many cases, these high risk motorists must file a special form with their states, an SR-22.
The Financial Responsibility Insurance Certificate, commonly called the SR-22, grew out of the momentum of the National Traffic and Motor Vehicle Safety Act. With a renewed emphasis on traffic safety, the states passed legislation that requires certain drivers to maintain a current SR-22 filed by an eligible insurance company. The filing is closely monitored and the insurance company must immediately notify the state via an SR-26 should the insurance be cancelled or expires.
While different states have different specifics dealing with the SR-22, they are all generally related to the following:
- There are different statistics, however it is generally accepted that up to 40 percent of all accidents and vehicle deaths are alcohol-related. Conviction of a driving under the influence charge usually results in the loss of or suspension of driving privileges. In such circumstance, the driver is often required to submit an SR-22 certificate through the insurance provider to have the license reinstated or reissued. A period of three years is normal to require for annual renewals of the certificate. There are situations, however, that result in a lifetime requirement for an SR-22.
- Lack of Coverage
- Drivers convicted of operating their vehicles without the required legal minimums of coverage are usually required to file an SR-22 as a part of their judgment. In some states, simply being ticketed for lack of proof of insurance can result in the requirement of an SR-22 to keep a driver’s license.
- Teenage Drivers
- Statistics prove that new and teenaged drivers are at a higher than normal risk of being in accidents with automobiles, causing as much as 27 percent of all accidents. State laws vary, but it is common in many that teens or their parents carry insurance with an SR-22 rider.
- Judge Imposed
- As the goal of the high risk motorist classification is to protect other drivers, legislatures in most states give the courts and their departments of motor vehicles wide latitude in requiring submission of an SR-22 for the privilege of driving. Some situations, in addition to the above, that might result in such a legal requirement include:
– Driving with a suspended license
– Driving without a license or with a revoked license
– Getting an excessive number of tickets
– DUI on a bicycle
– Failure to appear in court
– Child support issues
– Driving in darkness without lights turned on
– Solely at judge’s discretion
Types of SR-22 Certificates:
The SR-22 is not itself insurance. It is a financial commitment from the insurance provider that the required insurance is in place and in force on the driver. There are actually three different types of SR-22 certification. These include:
- Operator Certificate
- The driver has coverage in any vehicle, including non-owned vehicles.
- Owner Certificate
- This covers either specifically listed and owned vehicles or is blanket coverage for all vehicles the driver owns.
- Owner-Operator Certificate
- This coverage provides protection for all vehicles driven, whether owned or not.
The process of applying for insurance that provides SR-22 coverage begins with the local agent or office. Once the insurance is in place, the insurance provider’s main office will deal directly with the DMV or secretary of state, providing the SR-22. The government agency will then deal with the driver, a process that can take up to 30 days in most states.
The provision of SR-22 related coverage is an important part of many insurance providers’ business. Although rates will be higher to show the added risk, they provide an important service in protecting all drivers from financial irresponsibility related to driving.