When you buy a car insurance policy you are establishing a contract that is governed by specific state and federal laws–laws that your insurance company is required to enforce. Since insurance is so tightly regulated in most states, insurance companies are more than ready to enforce the laws in order to protect themselves from liability or criminal prosecution. Rest assured your car insurance company is not likely to help you skirt the law in your state.

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In the days before computerization, getting around insurance laws was a lot easier than it is today. But with online reporting and direct access to the DMV records via the Internet, it’s nearly impossible nowadays to operate outside the law without anyone knowing about it.

As long as you meet state requirements for car insurance you have nothing to worry about.

But if you attempt to operate a vehicle without proper insurance, and you’re pulled over or involved in an accent, the authorities will know about your lack of insurance within minutes.

Will my insurance company enforce minimum state liability limits?

Although there are a small handful of states that allow individuals to self-insure, most require drivers to procure insurance through a licensed provider. That provider is required to provide at least minimum liability coverage according to the regulations in each state. You can bank on the fact that any car insurance company licensed to do business in your state will enforce minimum liability amounts. To do otherwise would be to jeopardize their license.

To help you further understand this, we’ll use Arizona as an example. According to Arizona’s Department of Transportation, drivers in that state are required to carry minimum liability coverage of 15/30/10. Those three numbers represent thousands of dollars of coverage for bodily injury and property damage. You won’t be able to purchase a car insurance policy in Arizona that provides any less coverage. Of course, you can always increase those limits to provide yourself with more protection.

What will my insurance company do if my policy lapses?

Every state requiring individuals to purchase car insurance from a licensed provider also makes provision for being notified in the case of a policy lapse or cancellation. In other words, your car insurance company is required by law to inform your state’s department of motor vehicles in the event your insurance is no longer in force. Most of the time this is done electronically without any input needed from the driver. Let’s take a look at Florida to see how this is implemented practically.

According to the Florida Department of Highway Safety and Motor Vehicles website, insurance companies covering drivers in that state file electronic forms every time a new policy is taken out or an existing policy is canceled. This is done without any input from the driver.

That means if you forget to make your car insurance payment it’s possible your policy could be canceled without your knowledge.

In such a case you would receive a letter from your insurance company and the motor vehicle department, usually within ten days of the cancellation. If it turns out you had no other insurance in force at the time your policy was canceled you could face suspension of your registration and/or driver’s license, plus substantial fines and reinstatement fees.

Will my insurance company enforce an SR-22 requirement?

If you are required by a court to file an SR-22 form it’s probably because you have either committed a series of serious offenses or you have allowed your insurance policy to lapse on more than one occasion. The SR-22 is basically a form that guarantees you have insurance in force and the financial resources to keep that policy in force throughout its term. In most states, you have the responsibility of informing your insurance company of the need to file an SR-22.

If you don’t inform your insurance company, they will eventually find out when they do their routine check of your driver history. Once this information is discovered, the insurance company will file the form on your behalf, but it could result in higher premiums because you failed to inform them in a timely manner. If a court orders you to file an SR-22, just do it–there’s absolutely no advantage in trying to get around it.

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