Does a Suspended License Affect Your Insurance?
Understand the extensive impact a suspended driver's license has on your auto insurance, affecting current policies, future coverage, and long-term rates.
A suspended driver’s license significantly impacts auto insurance. This shift in status often leads to immediate and long-term changes in insurance availability and cost.
Impact on Current Auto Insurance Policies
A suspended driver’s license carries immediate and direct consequences for an existing auto insurance policy. Policyholders generally have an obligation to notify their insurance provider about a license suspension, as this change affects their insurability. Insurers frequently check driving records, especially at renewal times, and will discover a suspension.
An insurer may choose to cancel a policy mid-term if a license is suspended, particularly if the policy contains specific clauses regarding driver eligibility or misrepresentation. While some states limit mid-term cancellations to reasons like non-payment or fraud, a suspended license can make you a higher risk. If the policy is not cancelled, premiums are likely to increase significantly upon renewal due to the elevated risk associated with a suspended license.
Driving with a suspended license invalidates most insurance coverage, leading to severe legal and financial penalties. If an accident occurs while driving with a suspended license, the insurance company will likely deny coverage, leaving the driver responsible for all damages and injuries. Maintaining continuous coverage, even with a suspended license, can help avoid a lapse in coverage which might result in even higher rates when the license is reinstated.
Securing New Auto Insurance Coverage
Obtaining new auto insurance coverage becomes more challenging when a driver’s license is suspended or after a suspension that mandates high-risk coverage. Many standard insurance providers are reluctant to offer policies to individuals with suspended licenses due to the increased risk they represent. This often necessitates seeking “high-risk” or “non-standard” insurance from specialized carriers. These companies cater to drivers with suspensions, and their policies come with higher premiums.
A common requirement for drivers with suspended licenses, especially after serious offenses like DUIs or driving without insurance, is the SR-22 form. An SR-22, also known as a Certificate of Financial Responsibility, is not an insurance policy itself but a document filed by the insurance company with the state’s Department of Motor Vehicles (DMV). This form serves as proof that the driver maintains the minimum liability insurance required by the state. In some states, particularly Florida and Virginia, a similar form called an FR-44 may be required, which mandates even higher liability coverage limits.
The SR-22 filing fee is a one-time charge, ranging from $15 to $25. However, the significant cost comes from the higher insurance premiums associated with being classified as a high-risk driver. Drivers with a suspended license may see their insurance rates increase by an average of 67% or more. The exact increase depends on the reason for the suspension, the driver’s overall history, and the length of the suspension. Not all insurance companies offer SR-22 filings, so individuals may need to shop specifically for insurers that do.
Insurance Considerations Following License Reinstatement
Once a driver’s license is reinstated, the insurance situation begins to shift, though the effects of the suspension can linger. If an SR-22 or FR-44 was required, the driver will need to maintain it for a specific period, ranging from two to five years, depending on the state and the nature of the violation. It is important to avoid any lapse in coverage during this period, as it can reset the SR-22 requirement and lead to further penalties.
As the driver maintains a clean record post-reinstatement, the possibility of gradually decreasing premiums over time emerges. Insurance companies regularly reassess risk, and demonstrating safe driving behavior after a suspension can help lower rates. While immediate high costs may subside, past suspensions can still influence rates for a period, often for three to five years, as the violation remains on the driving record.
Shopping around for new insurance quotes after the license is reinstated and the SR-22 requirement ends is a prudent step. Different insurers have varying approaches to pricing for drivers with past incidents, so comparing options can lead to more affordable policies. Many insurance companies offer discounts for defensive driving courses or for bundling policies, which can further help reduce costs.