Personal Finance

No insurance is a big deal; no proof is not

Question: I was ticketed for being unable to find my insurance ID card when stopped by police. Though I had proof in court that my auto insurance was in force at the time of the citation, the judge found me guilty after saying, "If you were involved in an accident, would you have been able to produce your insurance card at the scene?  No."  Shouldn't having valid insurance be enough? Am I really guilty? 

Answer:  You are guilty of failure to provide proof of insurance, but not of driving without insurance .  These are two separate offenses in most states, with failure to show proof of auto insurance a lot less serious than bdriving without any car insurance coverage.

While some states (such as Arizona and Idaho) now allow electronic proof of insurance to be shown on smartphones, most states still require you to carry your actual insurance card with you and provide it upon demand to police or at the scene of an accident. If you are unable to do so you get ticketed.  (See " Proof of insurance: Paper or plastic? ")

The reason proof of insurance is required is for police to verify that you have insurance and, as the judge pointed out,  for you to provide other motorists with this pertinent information if you've been in anauto accident . 

In some states, the law permits dismissal if you provide the court with proof of valid insurance for the date of the citation. You would owe only administrative fees; for instance, it's a $25 fee in California. In other states, it's up to the discretion of the court to decide to dismiss the charge or find you guilty and fine you for not carrying your insurance card with you. 

Typically, failure to provide proof of insurance doesn't go on your driving record or receive DMV points.  However, if your state does place it on your record, then there is a chance your car insurance ratescould be affected.

Some insurers look at this type of offense as an "administrative violation" (similar to if you received a seat belt ticket) and will raise your rates a little.  Many insurers will instead let one minor ticket slide; however, it could be enough for you to lose your safe driver discount with some insurers. (See "Tickets that don't raise your insurance rates")

In comparison, driving without insurance is rather serious and can result in the state penalizing you with large fines, license and registration suspension and even jail time. 

After a conviction of operating an uninsured vehicle, there can be reinstatement fees and many states require you to carry a SR-22. The loss of your license and the actual lapse in insurance would cause your auto insurance rates to rise.

Chalk this conviction for being without your insurance card up as a lesson learned and remember in the future to keep it readily available. If your rates do rise due to this offense, shop around because there are other insurers that won't rate on such a minor violation and will offer you cheaper rates.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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