If your driving privileges have been suspended, it is difficult to get insurance coverage — but not impossible.
Auto insurers will seldom offer you coverage when you are not legally able to drive. Besides, you will not be covered if you drive illegally while your driver’s license is suspended.
However, if you have a suspended license, you can still find auto insurance — depending on the terms of the license suspension.
What Is A Suspended License?
Having a suspended license means your license is temporarily out of service, with the implication being that you cannot legally drive until it is reinstated.
A suspended license is temporary, unlike a revoked license, which is permanent.
Almost all auto insurance companies will not issue a new car insurance policy to a driver whose license is suspended. Why?
First, when your license is suspended, you’re not legally allowed to drive.
Second, insuring a driver with suspended insurance is a high-risk investment.
Why is insuring a driver with a suspended license a risky investment?
Although there are many non-driving related reasons to suspend a driver’s license, most causes are related to reckless driving or violation of road rules such as:
- Repeat traffic offenses or tickets
- Driving under the influence – DUI/DWI
- Being involved in an at-fault accident without coverage
- Accumulation of license points
To an insurance company, a driver that exhibits reckless driving is a claim payout waiting to occur. Such a driver is a loss to the company.
As a result, auto insurance companies charge the potentially risky clients high premiums — or deny them coverage altogether.
Do You Need To Inform Your Insurer If Your License Is Suspended?
Yes, it is important to inform your insurance provider when your license is suspended.
Almost all policies stipulate that you must inform your provider about anything and everything that raises or reduces your risk level.
If you inform your insurance agent, the issue probably may not affect your premiums.
Not telling your insurer may be used to deny a claim payout later on – if one arises.
Avoid such unnecessary headaches by alerting your insurance provider on any changes in your vehicle or driving record — particularly suspensions of your plates, license, or registration.
Why Do You Need Auto Insurance With Your License Is Suspended?
When your license is suspended, it only means you cannot legally drive your car – but your car is not grounded. As a result, you will still need insurance on your car for the following reasons:
- To avoid a coverage lapse.
- To cover other drivers.
- To protect your car in storage.
- To keep your care registered.
Avoid a Lapse In Coverage
When you cancel your coverage without having another one in place, you will have a lapse in your coverage. Insurance companies consider a lapse as an increased risk, and that could significantly raise your premium rates.
Cover Other Drivers
When your license is suspended, it does not mean your car is grounded. Named drivers, or family members, may need to use your car – and they will need coverage.
Protect Your Car In Storage
Even in storage, your car remains vulnerable to damage from different things such as vandalism, fire, theft, or natural disasters. If that happens, your insurance coverage may come in handy.
Keep Your Car Registered
Every renewal of registration requires you to have proof of insurance coverage. Furthermore, your insurance provider requires a valid license to issue you with coverage. If your license has been suspended, you need a special SR-22 policy to provide the necessary proof of coverage.
Getting Auto Insurance With A Suspended License
It is difficult to get auto insurance with a suspended license – but it is not impossible.
When your license is suspended, there are still ways to get auto insurance coverage.
What do you have to do?
There are two things you can do:
- Obtain/apply for a restricted license.
- Get SR-22 insurance.
Restricted License
When you have a suspended license – depending on your location – your best course of action is to obtain a restricted license.
A restricted license may conditionally reinstate your driving privileges and allow you to drive – with limited movement – to certain designated places/purposes:
- Work.
- Doctor’s appointments.
- Court.
- To transport dependents.
However, you may be ineligible to obtain a restricted license if you already have a previous suspension.
Furthermore, the restricted license may only allow you to drive during the day.
The eligibility and terms of restricted licensing are subject to state regulations and are often offered on a case-by-case basis. Some states provide a conditional license instead of a restricted license when your driving privileges are suspended.
Among the factors considered when applying for a restricted license include:
- The reason for license suspension.
- The reason for your restricted/conditional license request.
- Your driving records are all considered as part of the application process.
However, not all auto insurance companies will offer a policy for a driver with a suspended/restricted license.
You may speak to an insurer directly to understand your eligibility.
Understanding your eligibility or working with non-standard insurance companies may increase your chances of getting auto insurance with a suspended license.
SR-22 Insurance
In some cases, when your license is suspended, getting an SR-22 insurance policy form may be the way to get car insurance coverage and regain your driving privileges.
Form SR-22 is a “certificate of financial responsibility” or a “certificate of liability insurance.” Your insurance provider issues the SR-22 form to prove to your state (the DMV) that you have the required car insurance coverage.
SR-22 is not an insurance policy but is an extra measure of proof that you have valid car insurance.
As a result, you cannot submit the SR-22 yourself as it is the responsibility of your insurance provider to submit it to the state (DMV) on your behalf to get your license reinstated.
Here is an important point to note:
Though most insurance companies can offer you SR-22 coverage, some standard providers may still deem you high-risk and deny you coverage.
Does The Cost of Premiums Increase With Suspended License?
When your license is suspended, or if you have a history of suspended insurance, insurers will deem you a high risk. As a result, the cost of your policy will be higher.
However, the cost of a policy with a suspended license depends on the reason why your license was suspended. The rates are dependent because your insurance premiums increase based on the risk you pose to the provider.
It is vital to keep at least minimal coverage on your car, even though you will not drive it for the period of a suspended license.
Bottomline
When your auto license is suspended, the situation of your insurance becomes complicated.
Although you could be tempted to undertake the short-term cost savings, it is important not to cancel your auto insurance coverage.
Depending on the reason that drove your license to suspension, maintaining your auto insurance coverage could be a requirement for lifting the suspension.
Furthermore, you may not be able to drive around for some time, but you will need some form of coverage to keep your car and others driving it protected.