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What is an SR-22?

First off, let us be clear about one thing: there is no such thing as SR-22 insurance. Standard car insurance refers to a policy agreement between an insurance company and the insured that when it becomes necessary, the insurance policy will pay for damages to or caused by the insured as covered under the policy. Minimum coverage amounts for specific types of insurance, typically liability, are required by law to operate a vehicle, and it is renewable every year.

On the other hand, an SR-22 is a certificate issued by an accredited insurance company to the appropriate government agency guaranteeing that a particular individual under special circumstances has the necessary insurance coverage for the prescribed time period. It is formally known as a certificate of financial responsibility. As such, it is not an insurance policy.

However, because it is a financial guarantee and issued by an insurance company, it is understandable why some people consider it as a form of car insurance, and why insurance companies cater to this belief. It eliminates the need for a long explanation, but it may be important for some people to understand what the SR-22 actually is.

The SR-22 is required in most states for some people under special circumstances. These include but not limited to driving without insurance, driving under the influence of drugs or alcohol, excessive number of moving violations, and involvement in a car accident when the individual is found to be at fault. In many cases, these drivers have their licenses suspended or revoked, or have difficulty in getting insurance coverage. In order to address these issues, some states require an SR-22 to either lift the suspension or revocation of a license to drive, or for an individual to legally drive in the state.

An SR-22 must be maintained over an effective period between 3 to 5 years, depending on what is appropriate for the circumstances. In this it is again distinct from standard car insurance, which one can cancel at any time without effect on their license (unless they operate a vehicle without getting alternate insurance coverage). If a person required an SR-22 avoids any incidents within the effective period, an SR-22 may no longer need to be renewed and the individual can acquire regular, and much less expensive, car insurance. For more information about car insurance, contact your local car accident lawyer.