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 in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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In a nutshell...

  • You must have valid auto insurance when you own a car that is registered in your name
  • State officials require vehicle owners to register their vehicles to legally be driven, towed, and parked on public roads
  • The registered owner is also known as the legal owner of the car because they are liable to pay for fines and damages
  • If you don’t have insurance, your registration will be suspended for failing to keep valid and mandatory coverage

Having insurance is a must when you own a car. If you want to enjoy the freedom of owning your own car, you’ll have to pay for the vehicle and for insurance expenses so that you’re always in compliance with state law.

That coverage that you purchase, no matter how minimal the limits are, will help protect you from being sued by other parties after you’re involved in an accident.

Insurance is important for protection while you’re driving, but what about when you are planning to leave your car parked for months at a time? If you’re going to store the vehicle, you still need to make sure the car is insured properly.

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Failure to maintain a certain amount of protection could land you in trouble with the law. Here’s what you need to know:

State Insurance Laws Vary

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No state is the same. There are federal laws that pertain to driving, but it’s the state department that’s in charge of setting the requirements and enforcing the insurance laws within state lines.

You, as a vehicle owner, should know how much insurance is required on your personal vehicles. Be sure to check the state laws in the state where your car is registered and not stored.

There are very few exceptions to vehicle registration rules. In every state, your personal vehicles and your business vehicles need to have a valid registration before they can be operated on public roadways.

You can still drive a vehicle that’s not registered on private property as long as the property owner has given you permission to do so.

Not only do you need to register your vehicle to operate it, you also need to have a valid registration or a temporary placard issued by the motor vehicle agency to tow your vehicle and to park the car on the street or in a public lot.

If you don’t have valid tags or a valid placard to place in your window, you can face serious penalties.

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What does the law consider a public parking lot?

Parking lots are areas that are intended solely for parking vehicles for a reasonable amount of time. If you’re trying to familiarize yourself with the rules pertaining to insurance, it’s important to know what’s considered public property in the eyes of the state officials.

You’re free to tow, operate, and park unregistered cars on private property after being given permission by the owner, but it’s the public designation that complicates things.

Public property is property owned by one of the following:

  • The city
  • The township
  • The state
  • The government

The properties and lots are constructed and maintained using tax dollars earned by collecting sales tax, income tax, vehicle taxes, and more.

Most cities have public parking lots and garages in areas where there are shopping districts, colleges, and business centers. If you’re parking in these public lots or on the street, you need a valid registration.

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What happens if you park a vehicle without registration on public property?

If you make the mistake of parking your car on a public street or in a parking lot with an expired tag or no tag at all, you could be either cited with a ticket or your vehicle can be towed.

In most areas, parking enforcement cite the vehicle owner if it’s parked for a short period of time. They will call for a tow if the car is there for an extended period of time.

You Must Have Auto Insurance on Your Car to Comply with Registration Rules

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You’re billed for your vehicle registration in annual increments. When you pay your fees for the year, you might assume that your registration will remain valid.

The problem is that you have to comply with the requirements in your state or your registration could be suspended.

One of most common reasons that a registration is suspended when the fees have already been paid is because the vehicle owner failed to maintain insurance on the car.

If the DMV is notified that your insurance has canceled you will get a notice asking you to provide evidence of insurance. The DMV will then suspend the registration if you can’t provide this.

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How do motor vehicle agencies verify that your insurance is active?

Some states don’t have very advanced systems in place for verifying insurance. In these states, the state will send out random insurance requests where you’ll have to send in your proof when you’re audited.

It was easy to get away with being uninsured when a majority of states operated under this system, but now there are intelligent databases.

Several states have switched from the audit verification system to real-time verification systems where the state will manage an electronic database that is updated daily by insurers.

The carriers will report insurance and when coverage ends so that the state can tell which cars have coverage and which aren’t based on their VIN.

What are the penalties if you let your coverage lapse?

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If the agency discovers your coverage has ended, the first penalty will be to suspend your registration. If your tags are placed on hold, you can’t drive, tow, or park your car legally until you pay the fine, show you have insurance, and reinstate your tags.

Your car can be impounded for not having insurance when you’re on a public road.

A parked car can’t cause damage to other property but that doesn’t mean it’s okay to park a car just anywhere without insurance. If you’re leaving your car in a public garage or on the street, buy at least a minimum amount of insurance.

If you don’t have coverage currently, start getting instant quotes now online. Use our comparison system to see which carrier has the best rates.