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 Chris Harrigan

UPDATED: Sep 23, 2020

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Key takeaways...

  • Carrying auto insurance is mandatory and not optional in most of the 50 states in the US
  • When you own a car that’s going to be driven on public roads or parked on them, you have to have valid tags
  • One condition of registering your vehicle is that you will maintain insurance with a carrier licensed in the state
  • If you have an appointment to submit your registration application, you should bring evidence of insurance with you
  • Failing to maintain your car insurance without any lapses could lead to license and registration suspensions

You can’t drive a car in any state without registering it first. If you’re buying from a private seller, you’re given just 10 days to get your paperwork in order and transfer the registration to show that you’re now the legal owner of the vessel.

When you buy from a commercial dealer, they will generally take care of all of the registration paperwork for you.

The average American will buy between nine and ten vehicles within their lifetime. If you fall somewhere in line with the averages, you’ll have to register a vehicle in your name at least ten times in your life (even more if you move out of state).

Since it’s a transaction you’ll do every five to eight years, you need to understand your responsibilities. One of those responsibilities is to buy auto insurance.

You’ll want to find the best rate possible for the coverage you desire, so you should use our free insurance quote tool. Just enter your zip code above to compare rates!

Know How Soon You Have to Register Your Car


You don’t have a great deal of time to register a newly purchased vehicle in your name. Since the registration is what shows who’s liable to pay fines or to pay for damages that are caused by the vehicle, it’s important that the legal owner’s name is on file right away.

Check your state’s rules to see how long you have to take care of business.

Be prepared to submit an application for your license plates within 10 days of signing the bill of sale or sales agreement paperwork. Some states will give you 30 days to do the transfer if you’re moving to a new state and you’ve just become a resident.

You’ll have to pay the registration fee, vehicle license fee, and other applicable fees with your application.

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Do you have to buy insurance?

Car insurance isn’t just recommended, it’s required in most states. You’ll have to check with the state that you’re a resident in to see about the car insurance laws. It’s not unusual for a state to require auto insurance.

What’s generally required is a minimal amount of third-party liability coverage. In some no-fault states, you’ll also need to carry Personal Injury Protection which pays for your own medical bills.

There’s no avoiding the insurance requirement if it’s considered mandatory in your state. The only way that you can keep costs down is to shop around and compare rates.

As long as the policy that you’re carrying is in the owner’s name and it’s written by a licensed provider in the state, you’ll be in compliance with your state’s insurance law.

When should you buy insurance?


If you’re buying a car, you should purchase insurance on that vehicle right away. When you have existing insurance in place, the newly acquired vehicle will be covered for a short period of time until you can get to adding it.

Usually, your existing policy will extend coverage to the new car for 10 to 30 days.

If you don’t buy insurance on your vehicle right away, you’re leaving yourself vulnerable to possible financial losses. Anyone who’s injured in an accident with your vehicle has the legal right to come after you.

Without the appropriate coverage, there’s nothing to lean on. You could also be fined or penalized in another way.

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Do you have to show proof of insurance when you register your car?

If you’re registering your new vehicle in your state or you’re transferring your existing plates to a new state, you may have to show proof of insurance for the documents to be processed.

Not all motor vehicle agencies require their applicants to show evidence of insurance, but if it is required it’s best that you have all of your documents with you to avoid processing delays.

When you buy a car from a dealer that’s licensed to sell cars, you don’t have to take the trip to the DMV office to submit your applications and pay your fees. Everything can be done while you’re in the finance office.

Since your application is submitted by the agent, you’ll have to show them proof of insurance before you leave with your car.

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Proving You Have Full Coverage for Financed Vehicles


If you’re financing your vehicle, you might have to show more than just proof of insurance. That state could not care less if you have full coverage on your vehicle but the lender does.

It’s the finance company that wants to see that you have the property insured in case something happens to it. Bring proof of full coverage along with you.

You may not be able to register your car without having insurance but can you buy insurance on a car that’s not registered? You can get into a bit of trouble if you don’t time your transactions right.

You do need to have a valid registration in your name to insure your vehicle with standard coverage but you’ll have 30 days to register it.

What happens when you don’t have insurance?

If you don’t maintain insurance on your car and you have active license plates, it won’t take your DMV much time to find out. The motor vehicle agency is in charge of issuing and monitoring the vehicle licensing.

To monitor insurance compliance, agencies often use electronic verification tools that will check the real-time status of insurance by VIN.

If you don’t have valid license plates, you’ll be pulled over by law enforcement and your car is likely to be towed.

If you don’t have insurance on a licensed vehicle, the same thing can happen. You can also lose your license and face monetary penalties that pile up over time.

Some states even order habitual offenders who drive without insurance to serve jail time.

You may not have to show that you have insurance to get your plates but you definitely need coverage to stay in compliance. To find the best deal on coverage in your zip code is to use the Internet. Use our comparison tool today and find the best rate available in minutes.