What is Proof of Insurance and Why Do You Need it?
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In every state except New Hampshire, drivers are required to purchase some type of auto insurance. In most states, drivers are also required to provide some proof of their insurance policy—typically in the form of a physical or electronic insurance ID card.
In this article, we’ll cover what proof of insurance is, why it’s important, and what you need to know before you hit the road. If you think you might be in the market for a new car insurance policy, enter your ZIP code below to compare quotes from reputable insurance companies:
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What is Proof of Insurance?
Proof of insurance is, simply put, proof that you have adequate insurance coverage to legally operate your vehicle. If you’re pulled over for a traffic violation or get into an accident, a police officer will typically ask to see your proof of insurance, in addition to your driver’s license and your motor vehicle registration.
When you purchase an auto insurance policy, your insurance company usually provides you with a physical insurance ID card. In some states, electronic proof of insurance is acceptable in place of a physical card. Many drivers leave their proof of insurance in their glovebox alongside their registration so that it’s within easy reach if they need it.
What Information Does Your Proof of Insurance Include?
Your insurance ID card typically includes the following essential pieces of information:
- Your auto insurance policy number
- The effective date of your insurance coverage
- The expiration date
- The name of your insurance company
- The name of the policyholder
- Your license plate number
- Your vehicle identification number
- Your vehicle’s make, model, and year
Proof of car insurance doesn’t typically provide additional details about your insurance policy — it just certifies that you have the minimum required coverage in your state. For additional details about your policy, you can contact your insurance agent or review your coverage details online in your customer account.
Why Do You Need Proof of Insurance?
There are several scenarios where you may need to prove that you have car insurance coverage. First and foremost, if you get into an accident or are pulled over, you’ll need to provide information about your insurance policy to law enforcement officers or the other motorist.
You may also need to provide information about your insurance coverage if you visit the DMV, renew your license, or register a car. Essentially, your proof of insurance will come in handy anytime you need to verify that you have an active car insurance policy.
What Happens if You Lose Your Insurance Card
It’s a good idea to store your insurance card in your glove compartment or a similar spot for safekeeping. But even if you do lose track of your proof of insurance, it’s easy to replace. You can request a new copy from your insurer and get the information mailed to you. You can also receive a digital copy that you can print out.
In most cases, digital proof of insurance via your phone is good enough, even if you don’t have a physical copy. Many insurance companies have mobile apps that come with a digital insurance ID card. New Mexico is the only state in which digital proof of insurance is not always accepted.
If, for whatever reason, you don’t have proof of insurance on your person while you’re driving, you may face a small fine if you get pulled over or are in an accident. But as long as you’re eventually able to prove that you do, in fact, have car insurance coverage, the consequences usually aren’t severe. They pale in comparison to the consequences of driving without insurance at all, which can include hefty fines and even the suspension of your license.
Required Auto Insurance Coverage
Auto insurance is required in almost all states — New Hampshire is the only state that allows uninsured drivers on the road. Still, uninsured drivers must prove financial responsibility to cover costs in the event of an accident.
But even in the Granite State, adequate insurance coverage is still a good idea. Different states have different minimum insurance requirements. Depending on where you live, the types of insurance you may need to purchase include:
- Liability insurance: This type of insurance, which consists of both bodily injury liability insurance and property damage liability insurance, is the foundation of most car insurance policies and is always required, although minimum coverage limits vary by state.
- Uninsured or underinsured motorist insurance: UM/UIM insurance coverage is required in some states and covers you if you get into an accident with a driver who is uninsured or has inadequate insurance coverage.
- Personal injury protection: Also known as PIP, personal injury protection coverage is also required in some states. This type of insurance covers medical bills regardless of who is at fault in an accident.
- Collision insurance: Usually optional, collision insurance covers damage to your own vehicle in the event that you’re in an accident. Policyholders must decide on a deductible for this type of coverage — the lower your deductible, the higher your monthly premiums tend to be.
- Comprehensive insurance coverage: Like collision insurance, comprehensive insurance is usually optional. It covers non-accident damage to your vehicle, such as theft or natural disasters.
- Gap insurance: Once you drive your car off the lot, it immediately begins to depreciate in value. Gap insurance covers the gap between the money you owe on an auto loan and the actual value of your car. It’s a common type of coverage for vehicle owners who have recently purchased a new vehicle.
How Much Auto Insurance Coverage Do You Need?
While the minimum amount of coverage you need to purchase is mandated by your state, it’s often a good idea to go above and beyond your state’s minimum coverage limits. This is because, if you get into an accident, minimum coverage might not be enough to cover all expenses. In some cases, you may end up having to pay out of pocket once you’ve exhausted your insurance policy’s coverage limits.
When deciding how much insurance coverage to purchase, you should take into account your budget, your car’s age and value, the likelihood of getting into an accident, and the likelihood that you could cover the cost of repairing or replacing your vehicle if something were to happen to it.
It’s best practice to purchase as much car insurance coverage as you can afford, within reason — the more coverage you have, the more financial protection you’ll be able to take advantage of if you do get into an accident.
Find the Best Deal on Car Insurance
If you’re looking to purchase a new auto insurance policy, one of the best ways to make sure you get a great deal is by shopping around. Getting personalized insurance quotes from multiple auto insurance companies ensures that you can compare policies accurately to decide which one is the right fit for you.
Compare.com makes the process of shopping for car insurance fast and easy. Just provide some basic information about yourself and your vehicle, and compare quotes from top insurance companies in just a few minutes. Once you decide on an auto insurance policy, you can purchase your policy online with just a few clicks.
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