Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Aug 2, 2021

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Here's what you need to know...

  • Officers can see if your car is insured electronically
  • You may be pulled over for driving with suspended plates
  • Many states no longer require vehicle owners to present proof of insurance when registering a vehicle

While car insurance premiums can be expensive when you have a high-risk driver in the household, insurance is a must-have when you want to pass the burden of paying for financial losses onto a car insurer.

Failure to comply with the mandatory car insurance requirements can lead to much more than fees that much be paid out-of-pocket, it can lead to criminal penalties and court fees.

While this was the case in the past, technology has changed the way that insurance coverage can be verified. Insurance companies report any cancellations or new insurance to the state. While there are hiccups, the state generally keeps track of this by your license plates.

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Can law enforcement verify that you have active car insurance coverage?

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Years ago, driving without insurance was not as risky as it is today. The only time that drivers would really have to worry about their choice would be if they were involved in an accident.

It was not out of the ordinary for someone with no insurance to carry around an ID card that was not actually valid to present as proof of insurance to police officers. Insurance companies and officers had no way of stopping someone from doing this. The insurance card would show when the policy binder was issued and approximately how long it was supposed to be active. But the card would look exactly the same if you cancelled early.

For months, an uninsured driver could pose as if they were insured without being questioned.

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How Did Electronic Verification Change Everything?

While this did work before there was electronic verification, it is no longer a technique that can be used to deceive. In fact, if a driver is caught trying to pass an expired ID card as active, they can be charged with another crime.

Officers can see if your car is insured electronically instead of being forced to make a phone call and check if a policy is active. If you have your insurance app on your phone, you can get around this by pulling up your card through your app. If you just have paper, the state’s system will match it to your drivers license and license plate.

This was made possible after an electronic verification system was developed and then implemented in the industry.

What is an electronic verification system?

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An electronic verification system is currently being made mandatory in many states. The states have a system in place that will require the departments of transportation to use the system to verify a vehicle’s insurance status.

All insurers that are licensed to do business in the state must report when a policy is purchased or when a policy is canceled. If a policy is cancelled without a new one being set up, the state might assume you’re an uninsured driver. Some states will do things like cancelling your auto registration until you have proof, or they may suspend your license and send you a notification in the mail. If you get this kind of notification, you should act on it quickly. No matter the reason behind it, insurance companies may not cover an accident if you’re driving without a valid license.

This type of electronic system makes it much easier for police officers and the transportation departments to keep track of which drivers have maintained coverage. It’s not without its quirks. Sometimes, your insurance carrier will not report your new insurance policy accurately. If you get pulled over in this type of situation, make sure you have proof of insurance or financial responsibility on hand. If they issue a ticket, make sure to submit the required proof in court earlier rather than later.

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What happens when a policy shows as canceled?

Many states no longer require vehicle owners to present proof of insurance when registering a vehicle because the verification is processed through a database and linked by the VIN.

The department of transportation will be the first to find out when a policy is no longer active even though the owner does not provide the policy number.

The verification is sent through from the insurer to the department.

Here are the steps that will occur when someone has a registered vehicle that is newly uninsured:

  • Policy cancels for non-payment, nonrenewal or another reason
  • The insurance carrier will notify the department of inactive policy status
  • Department will receive the electronic notification
  • Department will send a letter to the registered owner asking for proof of insurance within the next 14 to 30 days
  • If no new insurance is purchased, the registration will be suspended
  • Invoice for registration reinstatement will be sent to the owner

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How can an officer see when cancellation is reported?

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You might be wondering just how a cancellation that is reported to the Department of Motor Vehicles will then get reported to the police when they are initiating a traffic stop.

The police may not be able to see that a policy is canceled, but they will be able to see that the vehicle is being driven without active plates once the registration is suspended. You may be pulled over for driving

You may be pulled over for speeding, not stopping at a stop sign, etc. You may also be pulled over for driving with suspended plates, but once the office sees the cause you will also be cited for being uninsured. This is how most officers see that you have no insurance even when you do have proof of coverage.

What Are The Penalties for Driving without Insurance?

Driving without insurance will not just affect you if you damage another car or you cause injuries to people in a car accident.

You may actually face some serious penalties for driving without coverage even if you did not have a catastrophic accident.

You should know about all of the possible penalties that can be assessed before you let your policy cancel.

Here are some of the most common assessments:

  • Payment of traffic fines because of the citation
  • Suspension of registration or even driver license for multiple offenses
  • Order to submit SR-22 as proof of continuous coverage
  • Higher insurance fees for failure to maintain insurance
  • Damaged driving record that could make you a high-risk applicant
  • Sentenced to serve jail time for violating the law

If you are ready to buy insurance, it is time to start comparing the rates that are available in your state.

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