Is there such a thing as unlicensed auto insurance?
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UPDATED: Jul 8, 2021
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It’s common knowledge that people need to be licensed in order to drive their vehicles. In most states, they also need to have auto insurance, so it would seem that these two things go together.
Sometimes, people wonder if there is auto insurance for unlicensed people and, the answer is, “Yes.” Some auto insurance companies do sell auto insurance policies to those who are unlicensed.
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The Unlicensed from Foreign Countries
The answer may be surprising, because people need to have a license before they drive, but there are times when people will need to have an auto insurance policy for their vehicles even though they are not licensed.
One example is someone who moves to the United States and does not have a license in this country.
These immigrants may be licensed in their own countries, but they will be unable to obtain their licenses in the United States the very same day they arrive here.
They also may need to drive their vehicles right away while they are in the country if they are here for business or for education purposes. In this case, auto insurance companies will sell an auto insurance policy to these people.
Those with a License that Has Been Revoked or Suspended
Sometimes, people fall into troubled times when they receive infractions on their licenses that cause the Department of Motor Vehicles (DMV) to revoke or suspend their licenses.
If they own the vehicle, they might be able to save on their auto insurance costs if their states allow them to cancel their policies. In some cases, unlicensed people will still need to maintain their auto insurance on their vehicles.
A Financed Vehicle
A driver who has a car that is financed is, most likely, under the obligation to maintain comprehensive and collision coverage by their financing companies.
They may have also been required to purchase Guaranteed Auto Protection (GAP) insurance that will pay the difference between what is owed on the vehicle and the market value.
After a revocation or a suspension, these drivers are not going to be driving their vehicles, but they will still need to pay their finance companies.
The financing company will not rescind the order to maintain their comprehensive and collision and GAP coverage, so these former drivers will need to have auto insurance for unlicensed drivers.
The Car is Being Borrowed
The other reason the unlicensed will need to keep auto insurance is that they may want to offer their vehicles to a family member or a friend while they are grounded.
With the unlicensed auto insurance policy, the vehicle does not have to remain idle while the revocation or suspension is in place.
The Car Is Being Stored
Sometimes, people do not have anyone who is going to drive the vehicle while they are unable to do so themselves. In that case, they will just need to park the car where it will be safe. Accidents can still happen, even if the car isn’t going anywhere.
It’s possible for the car to be vandalized or damaged in a particularly violent storm. These are instances when comprehensive coverage will come into play, and the vehicles will need to be repaired.
The comprehensive coverage pays to have vehicles repaired when they have been parked and damaged without being in a collision.
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Auto Insurance for the Unlicensed May Not Be Found with the Larger Companies
Finding auto insurance for those who are unlicensed may be difficult but not impossible.
These people may want to forgo looking for an auto insurance policy from the larger national companies that everyone has heard of because these companies do not necessarily sell auto insurance for unlicensed drivers.
The auto insurance companies and agencies that will sell auto insurance to unlicensed drivers are the smaller, local agencies that can be found nearby in the car owner’s city.
They will even sell policies to those who are unlicensed due to reasons other than revocation or suspension.
Auto Insurance for Those with Undocumented Status
Sometimes, people are driving without a driver’s license because they would be unable to legally obtain one. For example, some states have a large segment of the population who do not have permission to be in the country. These people may not enter the DMV and apply for their driver’s licenses.
Auto insurance agencies are aware of the problem that driving without auto insurance can cause. When these people cause an accident and they do not have auto insurance, they cause everyone’s auto insurance premiums to go up.
These drivers are often unable to pay for the damages they cause, so the injured need to access their own uninsured motorist coverage.
Selling Auto Insurance to the Unlicensed is Not Illegal
It is definitely not illegal for auto insurance agencies to sell auto insurance to unlicensed drivers. Therefore, those who are unable to obtain a license do have the opportunity to purchase an auto insurance policy from some agencies.
Compare Unlicensed Auto Insurance Policies
While it is possible for people to purchase their auto insurance policies when they are unlicensed, they will want to pursue the company that will give them the best price.
On this website, our comparison feature will do just that for them. They will easily receive a list of several quotes for auto insurance policies they need today.