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UPDATED: Mar 13, 2020
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A car insurance card is a small paper or plastic card issued by your automobile insurance company that contains your insurance company’s contact information, your vehicle identification information and your name and address.
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A car insurance card provides proof of insurance for the driver of the vehicle should he or she be involved in a car accident or other auto mishap. Proof of insurance is required in all 50 states and the District of Columbia.
Proof of Insurance
By law, a current version of your car insurance card must be kept in your vehicle at all times. It must show the coverage dates of your auto insurance policy.
You must be able to produce your insurance card when asked by law enforcement officers or by parties involved in an accident with your vehicle.
Every state requires that you carry proof of insurance, whether it’s a car, truck, motorcycle or other highway vehicle. The insurance card is a record showing that you have met the minimum state insurance requirements and are financially responsible in case you have an accident.
Motorists must prove that they can bear financial responsibility or liability for an accident and are able to pay for physical injuries or property damage that their vehicle may cause.
If you are unsure what coverage values are required in each state, you can find the department of motor vehicles in your state by entering your state’s two-letter abbreviation into the web address, using New York as an example.
Most states accept a copy of your insurance card as proof of insurance. Some states however have imposed new regulations requiring that your insurance information be made part of a statewide electronic database.
Insurance companies submit your coverage information directly to the state database where it may be retrieved by law enforcement officials when necessary. Even if you live in a state, which requires electronic reporting, it is always best to keep an insurance card in your vehicle in case you need it in an emergency.
Purchasing an auto insurance policy is only one way to prove financial responsibility according to most state motor vehicle laws. If you do not wish to purchase insurance, many states will allow one of two other methods in order to prove your financial responsibility.
First, you may be able to place a large sum of money on deposit with your state’s treasurer. This amount can vary of course, from state to state, and depend on your motor vehicle driving record. At present, deposit amounts of between $25,000 and $100,000 are generally required.
The second alternative is to purchase or otherwise secure (with real property or other consideration) a bond for a specified dollar amount. There is a number of surety companies (bonding agents) licensed to do business in each state. Listings may be found on line using Google or another web search engine.
Proof of financial responsibility or insurance must be shown, when requested, in order to register a motor vehicle in most states. It must also be displayed when you are involved in an accident or at any time it is asked for by an officer during a traffic stop or at any other time.
If You Have No Insurance
The penalties for driving without insurance are steep in most states. They include stiff fines, the suspension of your vehicle registration and/or your driver’s license and possibly jail time. Before being able to reinstate your license or registration you will be required once again to provide proof of insurance by using a special form, SR-22.
The SR-22 form states clearly that you have met your state’s minimum liability insurance rules. This additional form is required for those motorists who have a DWI or another serious moving violation on their driving record.
It is also required for motorists who have caused an accident and did not have insurance coverage at that time. Drivers who have committed numerous traffic offenses and drivers who have had their licenses or registrations suspended or revoked for any other reasons would also be subject to carrying the SR-22 form in their possession.
The SR-22 requirement usually extends for a period of three years but may be longer in some cases. Even if you move, you are still required to maintain insurance coverage in your state of origin. If you’re insurance coverage lapses during this period or is cancelled for any other reason, you will once again forfeit your license or vehicle registration.
General Car Insurance Requirements
As mentioned above, a car insurance card is proof that you have at least the minimum liability insurance coverage required in your state. This coverage varies from state to state and is intended to cover bodily injury of a single person involved in an accident, injuries sustained by two or more people in an accident and damages to property.
These coverage amounts are expressed as a ratio in numeric form as in this example: New York requires minimum auto insurance coverage amounts of 25/50/10. This means that a driver in New York State must purchase liability insurance that provides at least $25,000 for the first person injured in an auto accident.
A minimum of $50,000 must be available if two or more individuals are injured in an accident, and $10,000 is the minimum amount of required coverage for property damaged in an accident. The highest required minimum coverage amounts in the US can be found in Maine and Alaska, 50/100/25.
Florida is the state with the lowest liability insurance requirements, 10/20/10. Other US states with low required coverage amounts are Ohio, 12.5/25/7.5; New Jersey and Pennsylvania, 15/30/5; Nevada and Delaware, 15/30/10; and Louisiana, 15/30/25.
Often the Minimum Requirements Aren’t Enough
Most experts agree that in this day and age, the state minimum liability insurance requirements are not enough to protect the average motorist in case of an accident. According to a story reported by USA Today, the average cost of an injury only accident is $126,000. A crash causing a death can cost up to $6 million!
These statistics are based on studies conducted by the Automobile Club of America, AAA http://www.aaa.com, in 2009. The AAA findings indicate that costs have risen sharply in just the last few years. In 2005, the last year AAA conducted a national survey, the costs involved in an injury accident averaged only $68,170, and a fatal accident averaged $3.24 million.
In most cases, state minimum insurance requirements haven’t changed in decades and motorists are well advised to purchase coverage that well exceeds their state’s minimum.
USA Today Insurance, says that typical recommendations for auto coverage are 100/300/50 but even those amounts might not be sufficient to adequately protect families from financial ruin in the event of an accident.
Experts now recommend coverage amounts of at least 250/500/100. USA Today explains that coverage can be economically increased by purchasing an umbrella policy that ties together auto and homeowners insurance policies. $1 million in liability coverage can be purchased for an extra $150 to $300 each year.
The next million in coverage would cost $75 and each additional $1 million after that would cost about $50, according to experts at the Insurance Information Institute. Drivers would be wise to consider extending their liability coverage in this manner. The results of legal action resulting from just a single accident could be devastating.
It’s Not Just About Liability Coverage
Consumer Reports, gives helpful advice to consumers shopping for auto insurance.
While basic liability coverage is required in every U.S. state, additional coverage is recommended for and purchased by most motorists. Coverage you may need includes collision, comprehensive, personal injury protection (PIP), and medical.
Collision coverage provides for vehicle repairs regardless of how a vehicle was damaged or who was at fault. This coverage is usually required by a bank or finance company that has a security interest in your vehicle, a car loan or lease situation.
Collision premiums can significantly increase the cost of an auto insurance policy. There are also deductible amounts that the policyholder must pay before the insurance company will pay the balance of the costs to repair or replace your car. Deductible values usually range between $200 and $1000. As a rule, the higher the deductible, the lower the collision premium.
Comprehensive coverage pays to repair or replace your vehicle in the event it has been stolen or damaged by an event other than a traffic accident. Comprehensive covers damage caused by vandalism, weather related events or other acts of nature, such as a falling utility pole or tree, an earthquake or other catastrophic event.
Personal injury protection is becoming a popular insurance option for motorists. PIP covers lost wages and the expenses of home based care and treatment that result from an injury accident. Coverage for emergency medical expenses may also be purchased, though care should be taken not to duplicate other health or disability insurance coverage that you may have.
Many auto policies also offer coverage for rental vehicles for a specified amount or number of days following an accident in which your vehicle is damaged.
Roadside assistance programs have also become popular offerings for many auto insurance providers. These programs provide help 24/7 for stranded motorists across the country.
No matter what your state requires for coverage, one thing is for sure. Auto insurance is expensive. Care should be taken to explore all available options in your area. In fact, those that can least afford it are often subject to the highest premiums when purchasing auto insurance.
According to a recent published article in Time Magazine, lower income households are likely to pay more for car insurance than drivers from more affluent homes.
Time cites a study by the Consumer Federation of America that maintains that poorer citizens are considered to be at higher risk for accidents by virtue of their income, occupation, education, the location of their residence and credit history. Higher risk equates to higher insurance premiums.
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