How Proof of Insurance coverage Works and Why You Want It – Investopedia

In most of the United States, drivers must have automobile liability insurance to legally drive a vehicle. Most states also require drivers to carry proof that they are covered. To make sure you have the right documentation when you’re behind the wheel, here’s what you need to know about proof of insurance.
Uninsured motorists are a major problem in the United States, where nearly 13% of drivers are estimated to lack insurance. If you’re hit by an uninsured driver, then you could be on the hook for your own hospital bills and car repair costs. The likelihood of this may happening varies by state. For instance, estimates of uninsured drivers range anywhere from 3.5% (Massachusetts) to 29.4% (Mississippi).
To try to reduce the number of uninsured drivers, 49 states require drivers to carry at least a certain minimum amount of bodily injury and property damage liability coverage. It can pay the other driver’s medical bills, vehicle repair costs, and other expenses if the policyholder is found to be at fault in an accident.
In Ohio, for example, drivers must carry a minimum of $25,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident, and $25,000 in property damage coverage. This is expressed in an insurance policy as 25/50/25. Drivers can buy more liability coverage than the minimum if they wish to, and that’s often a good idea if they have significant assets to protect in the event of a lawsuit.
Some states also require that drivers carry other types of insurance, such as medical payments coverage or personal injury protection, which can cover injuries to the policyholder and any passengers.
New Hampshire is the only state that doesn’t require drivers to buy auto insurance, although it strongly recommends it.
To prove that you comply with your state’s law, you are supposed to carry proof of insurance with you whenever you’re behind the wheel. If you are stopped by police, they can ask to see your proof of insurance along with your license and registration. You will also need it if you are ever in an accident.
Proof of insurance can be in the form of an insurance ID card or other document from your insurance company. To meet the proof of insurance requirements, your ID card or form must show the policy number, policy effective dates, covered vehicle, and policyholder name. 
In addition to the standard proof of insurance, some drivers will need an SR-22 form, also known as a certificate of financial responsibility. In Virginia and Florida, the form is known as an FR-44.
For example, you could be ordered by the state or a judge to get an SR-22 if you have been convicted of a DUI or DWI, have had several speeding tickets in a short time, or have a hardship license.
The SR-22 isn’t a separate insurance policy. It’s a form that must be filed with your state to prove that you meet its minimum auto liability requirements.
Your insurance company will typically file the SR-22 form for you electronically, although in some cases, it may need to be sent through the mail. 
When you purchase a car insurance policy, the insurance company will typically send you proof of insurance right away. You may also be able to download a temporary insurance card to use until the hard copy arrives. 
You’ll receive a new insurance card every time your policy renews, or whenever you make changes to your coverage. When you receive a new insurance card, shred and throw out your old card and put the new one in your vehicle so you can prove that your insurance is up to date. You may also want to photograph or make a photocopy of your latest card and keep it apart from your car, just in case.
In most states, proof of insurance is also available in electronic form. So if you’re stopped by law enforcement, you can show them a digital insurance card on your smartphone.
If you lose your insurance card and need to get proof of insurance, you have a few options: 
If you are stopped by police and don’t have proof of insurance with you, then the officer can write you a ticket. Depending on your state, you could be subject to fines and other penalties.
For the specifics, visit your state’s department of motor vehicles website for information about its minimum insurance requirements and the penalties for not having proof of insurance.
Insurance Information Institute. “Background on: Compulsory Auto/Uninsured Motorists.”
Insurance Information Institute. "Estimated Percentage of Uninsured Motorists by State, 2019."
Insurance Information Institute. “Automobile Financial Responsibility Laws by State.”
New Hampshire Department of Public Safety, Division of Motor Vehicles. “Insurance Requirements/SR-22.”
State of Florida Department of Highway Safety and Motor Vehicles. "FR-44 Insurance Industry Memo."
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