Drivers who need instant proof of insurance are those drivers who were found driving without coverage and need it to reinstate their driver’s license or vehicle registration. There is also a law stating that all drivers need some kind of proof of financial responsibility when they drive. This financial responsibility is often in the form of auto insurance and the “proof card” needs to be in the car at all times so it is available upon request of any traffic officer.

Because all states require financial responsibility and car insurance is the most popular form of it, it’s important to know the type of liability that is essential for all drivers to carry, as dictated by state law. Bodily injury liability and property damage liability are the two that are required in every state. They take care of the other driver’s injuries and repair costs, up to the amount purchased. In some states, more insurance is required such as uninsured motorist and personal injury protection coverage. Uninsured motorist liability protects the policyholder and members by enforcing their insurance carrier to pay for damages inflicted upon them and/or their property by the motorist without insurance. Personal injury protection is a type of medical coverage offered by most auto insurers, which will pay for a list of things including lost wages, accident-related injuries, and pedestrians struck. State legislation believes it to be in the best interest of each driver to have this law in effect.

When a driver finds themselves in a situation involving a traffic stop or accident, the officer in attendance will usually request proof of insurance in addition to the driver’s license and vehicle registration. If the driver does not have this proof of insurance, consequences will follow. They may not be quite so stern if the driver can prove they have current auto insurance and simply forgot their card, but the penalties will definitely be severe when the officer knows the driver was operating the vehicle without insurance.

Another situation where this proof of insurance card may be needed is when you purchase a new vehicle with a loan. The bank loaning the money for your new purchase will require that the new car you purchase be covered with “full coverage” or comprehensive and collision coverage in addition to the state minimum requirements. These additional coverage options are in place to protect the car’s cash value if something should happen to it. The bank wants to be sure that in the event the car is totaled or damaged it will be replaced or repaired in a manner that will guarantee the bank doesn’t lose money on the car. Before the bank will agree to loan out the money, the driver purchasing the car needs to show them there is already an auto insurance policy in place to protect the vehicle as soon as it is purchased. The proof of insurance card will have the necessary information the bank will need to show such insurance.