7 Things You May Not Know About Car Insurance
1. There Are Auto Insurance Alternatives
There are alternatives such as self insurance or a surety bond available in many states, if you do not want – or cannot obtain – regular insurance. Some states allow you to choose this option, so long as you can provide the necessary funds. Typically, you can submit a cash deposit of at least $35,000, submit a surety bond from an approved company or apply for self insurance. Self insurance is commonly limited to individuals or businesses with nine or more vehicles. Finally, in just one state – Virginia – drivers can pay the state $500 for the right to not carry insurance of any kind. Whatever you do, make sure you are complying with your state’s auto insurance laws.
2. You’ll Need Proof of Insurance Required by Law
Most drivers are required to have proof of insurance on them at all times. This is because drivers may be asked to supply proof of insurance in any number of unexpected situations. In a majority of states, a driver can be charged with a traffic citation for failing to provide DMV proof of insurance, even if the driver did have coverage. People are commonly expected to provide proof in the following situations:
- When registering a new vehicle for the first time
- When renewing a vehicles’s registration
- During routine or non-routine traffic stops
- After a car accident
Typically, proof of car insurance should have your name, address, vehicle year, make and model, your policy dates, the insurance company and your policy number. Any document that has all this information is considered proof. In addition, many states allow for alternative forms of proof of financial responsibility other than insurance. In that case, a letter of authorization from the DMV or a certificate of self-insurance may be required, instead.
3. There Are Penalties for Not Having Car Insurance
The penalty for driving without insurance can change from state to state. In some states, penalties are limited to fines and vehicle impoundment. In other states, repeat offenses can result in jail time and criminal charges. Penalties increase with subsequent offenses, and can include any of the following:
- Fines from under $100 to more than $1,000
- Vehicle impoundment
- License suspension from one month to multiple years
- Revocation of driver’s license
- Revocation of vehicle registration
- Court-ordered community service
- Court-ordered jail time
- SR-22 requirements for license reinstatement
4. Contact Your insurance Agent
It is important to know how to file a car insurance claim if you get into an accident that causes damage or injury. Contact your agent to determine if the incident may be covered. If it is, follow the instructions given by your agent. You will typically be instructed to provide documentation including a police report of the accident, photos from the event and insurance information for other drivers involved.
Your insurance company will begin reviewing the information, and may begin negotiating with the other insurance company, if applicable. Make sure you keep copies of all records for yourself. Once your insurance company finishes processing the car insurance claim, you should receive a final determination. In many cases, you will receive a check or reimbursement for repair costs.
5. Some Drivers May Be Required to Get SR22 or FR44 Certificates
You may need to obtain SR22 insurance if you have been deemed a high-risk driver. If you are charged with driving under the influence, driving without insurance or any other high-risk driving behavior and you have a suspended drivers license, you will need to submit the certificate to reinstate your driving privileges. What is an SR22 certificate? It is proof of future financial responsibility. A certificate asserts that you are covered and meet the necessary insurance requirements.
Your insurance company must file the certificate annually, and you may be charged a fee between $10 and $50 to file it. An FR44 is a certificate in Florida and Virginia asserting that you must carry more insurance than the standard minimum requirements. Although neither SR-22 nor FR-44 is a type of insurance, you may read about SR22 quotes and rates. This is because insurance companies will often significantly raise your auto coverage rates if you have the SR22 requirement. In some cases, companies may outright refuse to cover you.
6. Avoid Car Insurance Scams and Fraud
Car insurance fraud is not uncommon in the United States. According to some studies, one in 10 claims is deemed fraudulent, and many false claims are created through staged accidents. Innocent drivers may commonly be roped into staged accidents. Additionally, other scams, like a tow truck scam, can punish innocent drivers looking for assistance. To avoid getting involved in a car insurance scam, you can take measures such as:
- Installing a dash cam in your vehicle provides you with a visual record of events.
- Always calling police immediately after any accident that causes damage or injury.
- Being wary of people who suddenly appear at the scene of an accident to recommend doctors, attorneys, or medical facilities.
- Keeping on the lookout for tow trucks that offer unsolicited services.
- Being careful on the road. Remain aware of your surroundings and avoid tailgating, as a staged rear-end accident is a common scam.
7. Some Cars Are Stolen More Than Others
The most commonly stolen cars tend to be older vehicles that lack anti-theft devices. Newer vehicles equipped with more technology, like GPS tracking, are less likely to be targeted by car thieves. The following vehicles were the most commonly stolen vehicles in the United States in 2021. The year listed is the model year most commonly stolen for that particular vehicle:
- Chevrolet Pick-Up (full size), 2004
- Ford Pick-Up (full size), 2006
- Honda Civic, 2000
- Honda Accord, 1997
- Toyota Camry, 2007
- GMC Pick-Up (full size), 2009
- Nissan Altima, 2020
- Honda CR-V, 2000
- Jeep Cherokee, 2018
- Toyota Corolla, 2020