Why do I need insurance to get a license tag for my car?

If you're registering a car, you won't get a license tag until you can prove that you've already purchased auto insurance for that vehicle.

That may seem like a tough rule to follow but after you read this you'll understand why it's the law in 49 states and the District of Columbia.

The reason: uninsured drivers cost the rest of us billions each year.  Those costs are largely taken on by insurance companies, who must pass along that burden to their customers.

Who pays when there's been an accident?

The reason for requiring proof of insurance when you're applying for a license plate is financial.  If you drive your car without insurance and you get into an accident, somebody has to pay for medical bills if someone gets injured.  Somebody also has to pay for property damage.

Property damage liability coverage and combined bodily insurance: that's most likely what the Department of Motor Vehicles in your state wants to see before they'll issue a license plate (tag).

Car insurance can seem expensive, but consider what would happen if you were in an accident without it.  If you get injured, you're facing medical costs on your own.  If you cause injury or property damage to someone else, they will probably sue you.  And if you're out of cash when that happens, you might face losing assets like your home and other property.
And then there are the penalties...

Penalties for driving without auto insurance are stiff.

Each state has its own rules about driving and car insurance. Likewise, each state also has different penalties for driving without insurance.

One thing's for sure, however: penalties are stiff.  That's because uninsured drivers cost society a LOT of money when there's an accident.

In New York State, for example, even a lapse in liability insurance coverage will get you into trouble.  The DMV there will suspend your car registration and your driver license...and if the lapse is more than 90 days you can kiss your plates goodbye too.  The suspension will last as long as the period of time for which you had no insurance.  Then it's $50 to get your license back.

Oklahoma's government has put some real teeth into their laws.  If you're stopped there with no proof of insurance, be prepared to have your car impounded on the spot!  You still get a ticket, too.

States have an interest in reducing the number of uninsured drivers on the road, which is why these laws exist.  That means if you plan on owning a car, plan on insuring it as well.

If you are shopping around for a car, we want to help you get the best possible deal.  Try our AardvarkCompare.com comparison tool: it will help you find the best possible rates on your next car insurance policy.


  1. "Why Uninsured Drivers Cost Us Over $2.6 Billion a Year" The Fiscal Times. Retrieved 4/3/2016 from http://www.thefiscaltimes.com/2015/02/20/Why-Uninsured-Drivers-Cost-Us-Over-26-Billion-Year
  2. "Oklahoma Drivers Face New Penalty for Driving Without Insurance". Retrieved 4/3/2016 from http://www.newson6.com/story/13425563/uninsured-oklahoma-drivers-coul
  3. Insurance lapses.  Retrieved 4/3/2016 from https://dmv.ny.gov/insurance/insurance-lapses