Are You Stuck With One Provider If You Have An SR-22 Requirement?

12 August 2021
 Categories: Insurance, Blog

SR-22 insurance requirements are often confusing, especially if you're dealing with them for the first time. States typically require drivers to file SR-22s following significant infractions, such as DUIs or reckless driving convictions. You may also have an SR-22 requirement as part of a condition for reinstating a suspended or revoked driver's license.

The SR-22 form proves that you are maintaining mandated levels of coverage for the period of your SR-22 requirement. Aside from a small fee charged by some insurers, SR-22 requirements do not require more than the state minimum insurance coverage, but they do often automatically place you into a high-risk group. As a result, you may want to try switching insurers to save on your premiums.

What Makes Switching SR-22 Insurers Tricky?

Switching insurance companies is usually a relatively straightforward process, but an SR-22 requirement can complicate your transfer. An SR-22 is also known as a "certificate of financial responsibility" because it provides an ongoing guarantee that you are meeting your financial responsibilities. Any insurer that provides this form to the state is obligated to report insurance lapses.

In practice, this means that you cannot cancel your insurance policy for any reason. Your insurer will always report a coverage lapse, which can potentially result in fines or other penalties. For example, some states may impose an immediate license suspension if you drop your coverage, and there may be significant hurdles to reinstatement.

Do SR-22 Requirements Mean You're Stuck With One Insurer?

Although switching insurers may seem daunting with the state's watchful eye looming over your policy, an SR-22 requirement doesn't restrict you to a single insurer. Instead, your coverage must continue uninterrupted when you begin a new plan. The best way to accomplish this is by allowing your old policy to overlap with your new one.

Remember that your new insurance provider must file an SR-22 with the state, just as your previous one did. When possible, it's best to work with an insurance company that specializes in working with these policies. They will have the experience to handle the transfer efficiently and to ensure your coverage doesn't lapse in the process.

While an SR-22 filing requirement usually means you'll need to deal with higher premiums, it doesn't mean you can't shop around for the best rate possible. As long as you take care to avoid creating a gap between policies, you are free to find an insurance provider that will both meet your state requirements and offer you a premium to fit within your budget. 

Contact a company that offers SR-22 insurance to learn more.