What is a Certificate of Financial Responsibility?

A certificate of financial responsibility (CFR) is essentially a document of vehicle liability insurance that is required by the Department of Motor Vehicles (DMV) or its equivalent in most states for insurance policies that are considered “high risk”.

The CFR may be known by a particular document number that is required when filling out the required insurance and sending it to the DMV for verification purposes. What follows are the four most common forms associated with the certificate.

SR-22

The DMV may require the SR-22 form for a driver to reinstate their driving privileges after having a car accident where they were uninsured or for committing certain types of traffic offenses such as DUI or DWI. In some states, an SR-22 may be required for up to three years for either driving without insurance or with a suspended license. The penalty is increased to five years for a DUI conviction.

There are some states which use the SR-22 as an alternate policy to making a deposit in cash or to provide security as proof of being financially responsible. For example, in the state of Arizona, a driver who is seeking reinstatement may use an SR-22 in the place of making cash or certificates of deposit worth $40,000.

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FR-44

Here, when a person gets convicted of driving under the influence of alcohol or DUI, an FR-44 form is required after the sentence is carried out. The driver must file the form to receive the minimal amount of coverage. The states of Florida and Virginia use an FR-44 form, which does differ from the SR-22 form in certain ways.

The FR-44 was designed to be a more severe form of punishment for those who have been found guilty of a DUI or DWI which will last for five years. Plus, FR-44 is separate from any additional penalties such as fines, jail, or having the driver’s license suspended. It is required for the following types of convictions;

–    DUI or DWI
–    Convicted of driving with a suspended license for a conviction or not innocent in juvenile cases
–    Violating the provisions of any federal, out of state, or valid local law or ordinance similar to the cases listed above

SR-50

An SR-50 is similar to an SR-22 certificate of responsibility. In Indiana, the SR-50 is a rider to the primary insurance policy for the driver. It is required that drivers have an SR-50 to get their license reinstated. This acts as a guarantee to the Indiana DMV that the driver will remain adequately insured for the stated period. A reinstatement fee is required along with the form which must be returned to the proper authorities so that the process can begin.

SR-26

The SR-26 only applies when the SR-22 is canceled or expires. When that occurs, an SR-26 form is required which certifies that the policy has been canceled.

The Bottom Line

A certificate of financial responsibility is a vehicle liability insurance document required by most state Department of Motor Vehicles (DMV) offices for “high-risk” insurance policies. If that sounds even more confusing, don’t worry. Like most government forms and regulations, it sounds more complicated than it really is. A certificate of financial responsibility is more often referred to as SR22 insurance. It is a simple document that your insurance company files after you have had your license suspended or revoked. If you take the time to learn all about cheap SR22 insurance, then you will be able to reacquire your good driver status quickly.

In the end, having the right CFR form will allow drivers who need to have their privileges reinstated to do so in a proper manner.

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