Auto insurance rates are determined by a number of factors including accidents or claims, a lapse in insurance and personal ratings such as credit scoring and age. The need for a SR-22 filing is established by a court-ordered judgment issued in response to one or more motor vehicle infractions. Often these judgments are accompanied by a suspended or revoked license, requiring the filing of a SR-22 prior to reinstatement.
SR-22s are usually required after a drunk driving conviction, discovery of driving without insurance or an at-fault accident while driving without insurance, a hit-and-run accident, or the failure to comply with alcohol testing. Multiple vehicle infractions that lead to a suspension of a license also require a SR-22 filing in most states.
Effect on Rates
Insurance rates, in relation to the issuance of a SR-22, are affected because of the related traffic violation or infraction, which raise rates whether or not a court-ordered SR-22 is in place. Some insurance carriers charge a small filing fee for a SR-22, although for many this is just a standard service with no additional charges incurred. Driving without insurance and other SR-22-related violations can knock preferred drivers into a standard rate, in addition to the points added to the driver's record. This, in turn, will “rate up” insurance policies and result in higher premiums.
Penalty terms vary on SR-22s, with the lowest usually around one year and some carrying a lifetime penalty. The average term ranges about three years, with DUI or DWI convictions carrying a five-year term in some states. Penalty terms can increase with subsequent motor vehicle infractions and unsatisfied legal judgments can force a SR-22 into a lifetime term. Any insurance lapse during an original SR-22 term resets the clock back to the original full penalty term.
SR-22s are guarantees or an assurance by an insurance carrier that a policyholder carries the proper liability insurance requirements for the home state. Sometimes called SR-22 certificates, certificates of financial responsibility, SR-22 bonds or SR-22 insurance, these filings are sent to the Department of Motor Vehicles by the insurance company, who will also notify the DMV of a policy lapse. SR-22s are sometimes filed electronically, but policyholders must carry a paper copy inside the vehicle at all times during the penalty term.