Is Your Car Financed? If So, You Should Know These Things About SR-22 Insurance

9 January 2016
 Categories: Insurance, Blog


If you have been convicted of drinking and driving, driving without insurance or another similarly serious traffic violation, you might be required by law to carry SR-22 insurance in order to maintain a driver's license. As you might already know, this type of coverage can be a bit more costly. The insurance itself is the same, but your insurance company has to go though a different process to keep your state informed of continuous coverage, which you will be charged for.

All of these insurance changes can be confusing, and you might have a few questions. For example, if your car is financed, you could be wondering if this type of policy will affect things. These are a couple of things that you should know.

Your Lender Does Not Care About SR-22 Insurance

One thing that can relieve your concerns is the fact that your car lender should not be concerned about the fact that you have SR-22 insurance. This does not affect your loan or your lender in any way -- it's just a state requirement based on some sort of conviction that you might have on your record. If you are worrying that you will have trouble financing a vehicle or keeping your financed vehicle, you shouldn't be. It should not even be a point of concern, but you can always call your lender and ask if you are looking for peace of mind.

You'll Still Have to Carry Ample Coverage to Satisfy Your Lender

However, there is one thing that you should know -- you will still have to have ample coverage to satisfy your lender. Your lender probably requires you to have ample coverage to pay for the car's damage to maintain its value or to pay the lender if the car is totaled. You may also have requirements in regards to the deductibles that you have in place -- many lenders require you to have reasonably low deductibles.

A lot of common advice about how to keep costs low when you have SR-22 insurance is to reduce your coverage to liability-only or to raise your deductibles. These tips can help you save money, but will generally get in the way of satisfying your lender's requirements, so you'll have to look for other ways to save money on your coverage, such as shopping around for an insurance company that offers lower rates. Then, you'll be able to maintain the coverage that your lender requires without spending more than you can afford on insurance. Contact a company like Illinois Automobile Insurance for more information.