Proof of Insurance

Proof of insurance is some form of proof you carry with you to demonstrate you meet your state's minimum liability insurance requirements.

Most insurance companies send you proof of insurance after you establish an insurance policy with them. Some states have electronic reporting whereby the insurance company contacts the state's DMV directly. Nevertheless, even if you live in such a state, it's still a wise decision to keep proof of insurance with you at all times.

Financial Responsibility
Each state has its own set of liability minimums for which you must prove you can pay for any injuries or damage you cause in an accident.

While the most popular option is to carry an insurance policy, there are two other options you can explore:

  • Cash Deposit - You can place a large cash deposit, typically between $25,000 and $100,000, with your state's DMV or treasurer.
  • Surety Bond - The other popular option is to secure a surety bond with a state-authorized surety company.

Electing one of these options means you will have to carry a certificate of your bond or deposit in your car at all times. This will serve as proof of financial responsibility.

When You Need Proof of Insurance and Consequences of Not Having It
You will need to provide proof of insurance or financial responsibility if you are in an accident or if you are pulled over and the police officer requests it. Also, a lot of states require proof of insurance when you register a vehicle.

Not having proper proof of insurance or financial responsibility with you can result in one or more penalties including fines, imprisonment, and registration and/or license suspension.

Keep in mind that if you do have your license or registration suspended, before you can have them reinstated you will need to provide proof of insurance or financial responsibility. In many states, you will often be required to submit an SR-22.