SR-22 Insurance
By: Patrick Mahaney
Montgomery, Alabama
March 24, 2025
Situation: A potential or existing client calls your office after a DUI conviction and tells you that to be re-licensed, he must obtain “SR-22 insurance” and wants your advice. What do you tell him (or her)?
SR-22 Defined: SR-22 is not insurance per se but a form or rather, a certificate of insurance, filed with the Alabama Department of Revenue, Motor Vehicle Division, by the driver’s insurance company, guaranteeing the driver has the minimum required auto liability insurance coverage for a specified period.
When Required: Code of Alabama, 1975, section 32-5A-191 [the state’s DUI statute] requires the revocation of the driver license and privilege to operate after a second DUI conviction in the past ten (10) years, as measured from conviction date of the first conviction to the arrest date of the second offense. Mandatory revocation orders are listed in Code section 32-5A-195 (j). There are eight (8) specific instances where the Secretary of Law Enforcement must revoke the driver’s license and privilege to operate. This is a mandatory duty of the Secretary of Law Enforcement and is not a discretionary action. After any revocation order is issued, a SR-22 certificate of insurance is required as a condition of reinstatement. The duration of the SR-22 requirement is three years from the date of the last revocation order entered and expires by operation of law three years to the date of the revocation order. See, Code of Alabama, 1975, section 32-7-31. [Note: The SR-22 requirement only applies to revocation orders, and not suspension orders. Don’t confuse the two terms.]
Insurance Costs: The cost to the consumer in purchasing an auto insurance policy, especially SR-22 insurance, is widely variable and depends largely on the auto insurance company’s risk model for both the insured vehicle and the insured driver. The cost of auto insurance is generally based on a formula of 60% cost of vehicle replacement / 40% risk profile of the driver, then that formula is placed into what level of insurance coverage requested and what amount of deductible the insured will agree to assume.
Auto insurance coverage is less expensive per $1000 increments once past $50,000 (based on the cost per $1000 unit of coverage). As example, a $100,000/$300,000 policy does not cost double what a $50,000/$100,000 policy costs, but costs only perhaps 10%-15% more. Under state law, the lowest level of coverage that may be sold is a $25,000/$50,000 liability policy. See, Code of Alabama, 1975, section 32-7-6. A basic $25,000/$50,000 policy, while meeting the state mandated requirement, offers the barest level of coverage and is probably insufficient in any collision. Failure to have sufficient coverage in an “at-fault” auto accident can and will result in a default judgment against the operator and the driver/licensee will be held in long-term suspension under the Alabama Safety Responsibility Act.See, Code section 32-7-14. That suspension will remain in effect until the claim is settled in full or a conditional release is entered. Practically speaking in view of today’s high costs of auto repairs, a policy in the amount of $100,000/$300,000 should be considered the minimum level of coverage.
There is nothing you can do about the 60% replacement cost of the vehicle except buy a less expensive vehicle. The auto insurance company knows the cost to repair or replace the insured vehicle and adjusts rates accordingly. There is nothing the insured can do about age and gender which is also a mathematical risk factor. A female driver over age 35 (certainly over 40) is the least risk profile based on auto insurance models and mathematical formulas. The most expensive driver to insure simply based on mathematical risk alone is a male under age 18, then a male under age 25; a female under 25 is placed at a slightly lower risk. The age bracket 40 to 65 falls into the least risk category, with the female driver placed at a lower risk than a male driver. There are other, less obvious factors, which include the applicant’s credit score and the applicant’s motor vehicle report, which show all auto accidents and tickets received in the past three years. The most common exception to this general rule in setting rates is a DUI conviction.
According to the auto insurance industry, the costs to repair vehicles from DUI crashes account for a full 25% of all auto repairs, even though the number of persons per 1,000 population operating a vehicle with a prior DUI conviction is infinitesimally small. In other words, the average “Safe Driver” is sharing, at least proportionately, in the overall cost of DUI crashes. The auto insurance industry knows that no matter how safe the insured may be, there is a possibility of a DUI-related crash caused by another party, and that risk must be factored in, at least as far as the “uninsured motorist coverage” cost to the policy. A DUI conviction marks the insured as a “high risk” and will either have the policy cancelled at the end of the policy term (usually sold in 6-month increments) or placed in the “standard coverage” rate for three (3) years. For that reason alone, that should be an incentive to get the defendant into a Pre-Trial Diversion program or plead to something other than an outright DUI.
Here are some important points to remember about SR-22 and two ideas on how to get around the high price of SR-22:
1. SR-22 is not insurance per se; SR-22 is a filing by an insurer indicating that the insured has the requisite coverage.
2. Requisite coverage is defined by state statute. In this state, it is $25,000/$50,000.
3. The SR-22 certificate costs very little to file—generally a filing fee under $50. It may cost nothing in some states.
4. Why do most people required to file a SR-22 certificate of insurance pay so much more for coverage? Because a single DUI conviction represents a huge risk factor to the insurance carrier. The insurance company thinks – rightly so – that a DUI convicted driver represents a substantial and unnecessary risk to the corporate profit margin. And if that person has been twice convicted of DUI? Then that person represents a huge and unjustifiable risk to the profit margin! The sooner the insurance carrier can get rid of any convicted DUI client, the better for the insurance company. For that reason, many of your “better” insurance companies, Alfa Mutual Insurance as example, will not sell SR-22 insurance, but directs the applicant to Trexis Insurance, a subsidiary company of Alfa which specializes in “non-standard” auto insurance, or to the state’s assigned risk pool.
5. If the potential or former client is mandated to obtain SR-22 insurance, then shop around. Auto insurance is a highly competitive business. Make at least three (3) calls to a licensed insurance broker or agent before you select a policy. As of 2023, there were 160 different insurance carriers that were engaged in auto insurance sales in this state, with State Farm the largest in total volume of sales at 24% of the auto insurance policies sold and Alfa Mutual Insurance second in sales with 14% of the market share. As noted, however, in effort to avoid excessive loss to the company, Alfa Mutual will not sell SR-22 policies. Your client will simply have to shop around.
6. If SR-22 is required, one cost-saving option is to buy an old “beater” — one that barely runs — and file SR-22 on that car and maintain insurance on “the better car” with a different insurance carrier. The repair cost to the “beater” is minimal and that step alone will reduce the actual cost for the SR-22 coverage.
7. Here’s another suggestion: Don’t use the same insurance company for the newly purchased SR-22 “beater”. Use a completely different company and don’t tell your primary insurance company about it or you may face cancellation of the current policy.