There are common misunderstandings about auto insurance, SR22s and licensed drivers that do not own vehicles. Though common, these misunderstandings, in certain situations, can result in suspended licenses and higher insurance premiums. Before you make any untimely insurance decisions, it is a good idea to clarify the misconceptions.
Every state requires licensed drivers to carry financial responsibility for any injuries they may cause to others as result of their driving negligence. In most cases, drivers elect to purchase auto insurance to meet those financial requirements. At minimum, drivers must carry the state minimum liability limits referred to as bodily injury and property damage coverage. These coverages pay the other parties injuries and damages up to the maximum amount of the selected coverages.
The SR22 is an insurance filing that is attached to the auto insurance policy. Also called the FR19 in some states, this filing is only issued by the carrier and upon the request of the policyholder. Once requested, the insurance carrier sends notification to the state’s Department of Insurance. The filing states that the policyholder carries acceptable financial responsibility and shows the inception date and expected expiration date of the policy. At the time of policy cancellation, regardless of the cancellation reason, the insurance carrier will notify the state that the policyholder no longer carries insurance through their company, along with the actual cancellation date. Not everyone needs an SR22 filing. If you are required to carry an SR22 filing on your policy, you will receive notification from your state’s Department of Insurance via standard mail.
Non-Owner's Insurance Requirements
If you do not share an insurance policy with a vehicle owner, then you must purchase a non-owner’s insurance policy. Not all insurance companies offer this coverage, nor do all companies offer SR22 filing options. Therefore, it is important that you provide accurate information to the insurance carrier in order to obtain the appropriate policy quotation. The non-owner’s insurance policy provides policyholders with liability coverage for every vehicle driven, with some restrictions. Non-owner’s insurance policies are often more expensive than a standard auto liability policy because the risk is potentially greater. This increased risk results from the fact that one day you may drive a Sonata and the next day you might drive a Hummer.
So, do you need to carry an SR22 filing if you do not own a vehicle? Well, if you have received notification from the Department of Insurance that you are required to carry the filing, then yes. The fact that you do not have a vehicle is not a consideration for the required filing. The filing demand generally comes after the state has received some type of notification that you may not have insurance. Before the state demands the filing, it will request that you send in proof that you carry financial responsibility. Failure to provide that proof generally results in an SR22 filing requirement and can also be accompanied with a license suspension.
Writing professionally since 2004, Charmayne Smith focuses on corporate materials such as training manuals, business plans, grant applications and technical manuals. Smith's articles have appeared in the "Houston Chronicle" and on various websites, drawing on her extensive experience in corporate management and property/casualty insurance.