It's not exactly common to hear that an individual carries an SR22 endorsement on their auto insurance policy. However, if you have been labeled a high-risk driver, it's very likely that you will be required to carry this on your insurance plan. Since this endorsement is not well-known, there are a number of misconceptions surrounding it. If you are being required to add this to your coverage, you need to be able to discern fact from fiction.
It's Auto Insurance
By far, the most common misconception is the idea that SR22 is a form of auto insurance. Make certain you understand that it is simply an endorsement by your insurance company certifying that your coverage limits at least meet the state minimum.
Given your status as a high-risk driver, some states may determine that the likelihood of you being involved in an accident is greater than other drivers. Consequently, in the event of an incident, the state wants to ensure your policy will be equipped to handle any financial responsibility you may incur.
It Comes With Expensive Costs
When the average person sees an increase in their premium payments after adding an SR22 endorsement, they assume the extra cost can be attributed to the SR22. This simply isn't the case. When you carry an SR22 endorsement, it is the responsibility of your insurance company to file the appropriate paperwork with the local DMV. To cover this service, insurance companies typically charge a nominal one-time fee.
Any increase you are experiencing with your premium payments can instead be attributed to your increased risk level. Since insurance companies base premiums on risk, the higher the risk you pose, the higher your premium.
It's Okay To Cancel The Policy
Once the SR22 endorsement has been reported to the state, some people think they can simply cancel their policy to avoid the higher premiums with no worries. For people doing this to save money, they only end up spending more money in the long run. Any time you make a change to a SR22 endorsed policy, the insurance company is required to immediately notify the state.
Unless another policy has been established to replace the canceled one, you could lose your license. At this point, to drive again, not only will you need to cover the cost of a new policy, but you might have license reinstatement fees.
If you're concerned about the specifics of obtaining an SR22 endorsement, an insurance professional, like one from Great Northern Insurance Agency, can assist you.