Does License Suspension Affect Car Insurance?

Yes, a license suspension does affect car insurance. Your insurance provider may cancel your policy mid-term. If it doesn’t, you may decide to cancel it yourself or leave it active.

Do Car Insurance Companies Run Your License?

Car insurance companies will run your license to see your driving record. Driver risk is one factor companies use to determine your auto insurance premiums. If your license is suspended, it indicates a higher driver risk and thus higher insurance costs.

Do Rates Increase After a Suspension?

Your car insurance rates will increase after a suspension, but the amount they’ll increase will depend on why your driver’s license was suspended and how long the violation will stay on your driving record.¹

Do I Need Car Insurance if My License Has Been Suspended?

If your license was suspended without any restricted use (meaning you’re not allowed to drive at all), you do not need car insurance, as you won’t be driving. Many people with suspended licenses suspend car insurance temporarily. However, if you have a restricted license, you’ll need the minimum coverage your state requires, plus any coverage required by your lender if you financed your vehicle.

“In some cases, car insurance may be required for cars that are leased or that have auto loans, even when a license is suspended,” says attorney Adam Rosenblum, who specializes in  personal injury, criminal defense, and traffic violations. “Likewise, in some cases proof of continuous insurance coverage may be required to reinstate one’s license.”

Should You Suspend Your Car Insurance?

Even though you don’t need insurance on a car you’re not driving, you should keep your policy active anyway.

Pros of keeping car insurance with a suspended license

You’ll avoid a lapse in coverage, which means your rates won’t be as high as they could be if you canceled coverage and needed to get it again. Additionally, even though your license has been suspended, you may be able to use it in restricted circumstances, like driving to work. If that’s the case, you’ll need insurance to drive in every state except New Hampshire and Virginia, the two states with no car insurance requirements. Plus, if your car has an auto loan or is a leased vehicle, insurance may be required for you to keep the car. Not to mention that even if you’re not driving your car, it could still become damaged in a hit-and-run, vandalism, or weather-related incident. For these reasons, we recommend keeping your car insurance but perhaps dropping some coverages, like collision coverage, if you’re not driving at all. And for all new motor vehicles, comprehensive coverage is essential, as it covers damages to events other than collisions.

“If your car is financed, the lender or lienholder will still require you to carry car insurance to protect against damage,” says Evan Marcotte, who owns Portfolio Insurance Holdings, an agency in Florida specializing in non-standard auto insurance. “Even if your car isn’t financed you may still want to carry comprehensive and collision coverage to protect against the unknown — storms, theft, etc.”

Cons of keeping car insurance with a suspended license

If you keep your insurance, you’ll have to pay the premiums, which may feel strange on a car you’re not driving.

Overall, maintaining an active insurance policy will keep your rates as low as possible when your license is reinstated.

“One of the most important reasons for why drivers should maintain their auto insurance while their license is suspended is to avoid higher premium rates when their license is reinstated,” says Rosenblum. “Keeping one’s current car insurance plan will avoid a gap in coverage.”

How to Lower Your Rates After a License Suspension

Of course, a license suspension will result in higher insurance rates, but you can keep them as low as possible by following these steps:

1. Find cheap car insurance companies that specialize in nonstandard insurance.
2. Drop unnecessary coverages, like collision coverage on a car you don’t drive or comprehensive coverage on an older car.
3. Lower your limits to the state minimums.
4. Bundle any other insurance policies you have with your car insurance, like homeowners or renters insurance.
5. Raise your deductible.

You can get car insurance with a suspended license, but not all companies offer high-risk insurance. Here’s how to get auto insurance without a license:

1. Find a provider. Not all companies cover drivers with suspended licenses. These are some of the best no-license auto insurance companies:
   • Acceptance
   • State Farm
   • Direct Auto
   • USAA
2. Compare rates. Compare quotes from multiple providers to see which one has the lowest premiums.
3. Pay your premium. If you pay your premium on time, your coverage will begin on your policy’s effective date.

“Many of the more well-known insurance companies may not have very good terms for people with a suspended license. Or they may not even offer coverage at all,” says Marcotte. “Some of them may require the payment in full for six months, or a large down payment.”

“Car insurance companies are not required to extend coverage to drivers with suspended licenses,” says Rosenblum. “Two notable insurance companies that generally offer coverage to drivers with a suspended license are GEICO and State Farm.”

Marcotte recommends that a driver with a suspended license find an agency or insurance company that knows how to help drivers in tough situations. “In a lot of states having valid car insurance will be a requirement for the driver to get their license back,” Marcotte says. “A lot of insurance companies realize that and are willing to write a policy knowing the driver is in the process of attempting to get their license reinstated.”

What Is High-Risk Car Insurance?

High-risk car insurance is for people with SR-22s or FR-44s (state-mandated forms that prove insurance coverage following certain traffic convictions) and/or bad driving records, including DUIs, at-fault accidents, and tickets. Drivers with poor driving records are considered high risk, or more likely to file claims. Car insurance companies place higher premiums on these drivers to protect their financial interests.

Here’s what to do after your license has been suspended:

1. Keep your insurance policy active if your insurer hasn’t already canceled it.
2. If your insurance company has canceled your policy, find a new provider to avoid a lapse in coverage.
3. Pay any required fees or penalties before their due dates.
4. Take any required classes, like a defensive driving course.
5. Do not drive until your license is reinstated. Or, if you have a restricted license, only drive under those restrictions.

In games, points are usually a good thing. But when it comes to your driving record, points are bad. Different states give different amounts of points for certain actions. For example, New York’s point system is shown below.

In New York, if you rack up 11 or more points within 18 months, the DMV will revoke or suspend your license.² See below for your state’s minimum points in a given time frame that result in a license suspension.

A license suspension is a temporary hold on your license that invalidates it, meaning you can’t drive legally.

Suspended vs. Revoked Licenses

What is the difference between a suspended and a revoked license? While suspended licenses are canceled for a finite period of time, revoked licenses are canceled permanently. People with suspended licenses can get their driving privileges back if they fulfill certain requirements, while people with revoked licenses may or may not be able to get new licenses, depending on the reason for the revocation.

There are a few reasons why a license would be suspended or revoked:

• Your license could be suspended for not having insurance.
• You could have caused an accident by driving recklessly.
• You could have received a certain number of tickets in a short time period.
• You didn’t have proof of insurance, which is legally the same as driving without insurance.
• You received too many points in a given time period.
• You had a DUI conviction.

Once your license suspension period is over, it’s not reinstated automatically. Rather, you’ll need to fulfill your state’s DMV requirements, which may require you to take a defensive driving class, pay a fee, or obtain an SR-22.

Here is exactly what you’ll need to do to reinstate a suspended license in each state.

What Car Insurance Looks Like With a Reinstated License

Car insurance will be more expensive after your license is reinstated because you’ll be considered a high-risk driver. The more risk the insurance company takes on, the higher your premiums will be.

If you get caught driving with a suspended license, you’ll have to pay a fee, go to jail, or have your suspension period lengthened. Punishments vary by state, as shown in the chart below.⁴

Will Insurance Cover an Accident With a Suspended License?

If you get into an accident while driving with a suspended license, your car insurance company will only cover the accident if your policy is still active. If the insurance company canceled your policy when your license was suspended, you’ll be responsible for the damage and injury costs out of pocket.⁵

Here are a few strategies to keep a clean record and avoid getting a suspended license:

1. Employ defensive driving tactics like scanning your surroundings, avoiding distracted driving, and braking early.
2. Avoid road rage.
3. Don’t drive while drowsy or under the influence.

An SR-22 certificate is proof of minimum insurance. If you get a DUI, you might be required to carry an SR-22 for a period of around three years.

Technically, you can buy a car with a suspended license. However, you won’t be able to drive it off the lot with a suspended license, so you’ll need a friend or someone listed on your policy to drive your car under your policy’s permissive-use clause, if any. Also note that if your license is suspended, you will probably encounter difficulty getting an auto loan, which makes buying a car difficult if you can’t pay for it upfront.

You won’t be able to rent a car with a suspended license. You’ll need an active, valid license to rent a car, according to the major rental car companies like Budget.⁶

In every state, you can technically register a car with a suspended license. However, some states ban you from adding yourself as an excluded driver on car insurance policies, so finding insurance will be more difficult, which may pose a problem for registering your vehicle. You may have to find a company that accepts SR-22s or people with suspended licenses. Then you will be able to register your vehicle.

If your car insurance policy is still active even with a suspended license, then yes, someone else can drive your car legally as long as you have borrowed car insurance coverage. Most policies come with a permissive-use clause that says that your insurance will cover anyone who drives your car with permission. In other words, car insurance usually follows the car, not the driver. That’s another reason to maintain insurance with a suspended license.

“If other individuals in the household use the car, maintaining auto insurance will also be necessary as drivers cannot operate an uninsured vehicle,” Rosenblum explains.

If someone drives your car frequently, does not live in your household, and is not on your policy, consider non-owner car insurance. Non-owner car insurance is basic liability insurance and is normally cheaper than regular insurance. If your insurance has been canceled or not renewed, non-owner car insurance may cost less than car insurance with a suspended license.

Just because your insurance was canceled doesn’t mean your license was suspended, although that’s one of the possible reasons your insurance would be canceled. Car insurance companies can also cancel your policy mid-term if you misrepresented yourself on your application, committed fraud, or didn’t pay for your policy within a specific time period.

A suspended license doesn’t always mean a lapse in insurance, but it does lead to higher prices down the road. Your best bet is to avoid getting your license suspended, but if it has been, keep your policy active to avoid even higher premiums in the future.