To be safe and legal while driving an auto in Panama, you must keep the following documents in your vehicle:
1. A current copy of the vehicle registration (registro unico vehicular)
2. A current copy of your auto insurance policy ( you should verify that the policy has been registered to the SOAT) site.
Auto insurance in Panama is similar to coverage issued in the USA/Canada and Europe. Protection for Basic third party liability, Medical payments, Collision and Comprehensive/Fire/Theft are available at very reasonable rates.
While the Panamanian Government requires proof of basic liability coverage in order to obtain a license plate, there is a good chance that the person who smashes into your car will NOT have auto insurance.