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...

  • Purchase a proper policy and pay all premiums on time to make sure the policy remains valid
  • Never provide inaccurate information to an insurance company or else the policy could be voided
  • Make sure the vehicle’s policy is covered under business or volunteer use of the car

Maintaining consistent and uninterrupted coverage on a car insurance policy positively does need to be a major responsibility.

Car owners positively cannot ignore, dismiss, or overlook maintaining coverage.

It’s against the law whether the person purposely drives without insurance or made a mistake leading to the expiration of an insurance policy. Even in states where driving without insurance is not a crime, heavy fines and other penalties would be imposed.

A basic insurance policy covers liability for damage to property and bodily injury or death to other persons. Hurting someone in a car accident could lead to being responsible for $75,000 in medical bills and other damages. Insurance is intended to cover those losses.

With that in mind, it is strongly advisable to make sure insurance – liability, comprehensive, and more – is valid and active. Compare car insurance options today by entering your zip code above.

The Basic Point

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n 48 states, car insurance is mandated by law. Depending upon the state, those who drive without insurance could face:

The first step of being sure car insurance is in place is buying a policy and then making all necessary payments and doing so on time. Policies are commonly sold in one-year terms.

A policy may even roll over automatically for the next year provided payments are continually met. Automatic renewal avoids an insurance lapse.

A person who buys more than one car or sells a car and buys a new one does need to acquire a new policy. The old policy was purchased for the previous car. Transferring the policy to another vehicle without contacting the insurance company is not how things work.

This is not to suggest purchasing a new policy will be difficult. Searching for policies online is easy. There are no reasons to not be able to find a quality policy quickly regardless of one’s personal driving or credit history.

Once a policy is in place, consider it a good idea to “spot check” validity from time to time. Statutory concerns over whether a policy is valid aren’t too troubling to examine either.

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Validity and Minimum Liability Amounts

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Those wondering if their policy is valid by law do not really have to worry. Each state does have a minimum amount of liability insurance required to register a car in the state.

The insurance company licensed to sell insurance in a particular state knows what the state’s mandated minimum amount is. An amount lower than the mandated minimum is not going to be sold on to a customer.

The minimum amount only offers the minimum amount of coverage. While a policy may be valid, it might not be truly adequate. Meeting state legal requirements is not the same thing as best protecting one’s financial well-being.

Protecting financial assets also requires not doing foolish with an insurance provider.

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Don’t Play Games with the Insurance Company

Deliberately lying on an insurance application is a terrible idea. For example, buying a policy while claiming to live at a different address than where one resides can be deemed misrepresentation.

At the very least, putting down an incorrect address may invalidate a policy since premium prices are, in part, based on where someone lives. In certain states, this calculation could be deemed a criminal offense.

Comparison shopping for a reasonably priced policy is fine. Making false statements is absolutely dangerous. That said, putting down a different mailing address in addition to the noted permanent address should not be a problem.

Just be sure the insurance company knows the story.

Nonpayment and Cancellation

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Nonpayment of premiums is the most common means in which an insurance policy ends up canceled.

Setting up monthly automatic payments on a credit card with an appropriately “freed up” remaining balance cuts down on the chances a payment will be missed and the grace period expires.

After missing a payment, the insurance company will send out a letter. If the letter goes to a PO box or a PMB, make sure the mail is being regularly checked at the address. Otherwise, the warning letter won’t exactly lead to much of a warning.

Probably the best advice that could be given here is to pay the full balance if possible. This way, the chances of defaulting on a payment are minimized.

Even if the policy is canceled, someone who is a good customer should not have a problem being reinstated. Regardless, during the time in which the policy has been canceled means no coverage is in place.

The owner ends up being personally responsible for all liabilities and damage if he chooses to illegally drive without insurance.

And be sure to follow all traffic laws at all times or else an insurance company may drop coverage – under certain circumstances – for high-risk drivers who consistently violate traffic laws.

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Ascertaining the Insurance Criteria

Purchasing a policy can be very easy for someone who has never had any troubles with the traffic court. Someone who has never filed a claim before or has filed very few claims or has never been at fault for an accident is not likely to ever be dropped from his or her coverage.

So, the insured may just go through life without worrying too much about a policy. He simply makes payments as required. The person may even do so even when circumstances change.

For example, the person may become self-employed and use the car as part of official business duties. He or she may even volunteer for a nonprofit and engage in any number of different tasks for the entity work is being volunteered.

There is nothing wrong with using a car as one sees fit, but letting the insurance company in on the new duties is absolutely advisable.

A personal auto insurance policy may or may not be valid under the circumstances in which the vehicle is being used. Playing guessing games in such a situation would be ill-advised.

A much wiser plan would be to simply call the insurance company, discuss the situation, and see if the policy needs to be changed.

Stay on Top of All Duties

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The best way to make sure a car insurance policy is valid is to simply stay on top of all responsible duties. Buy the right policy, pay it on time, and always provide the insurance company with correct information.

Doing so will drastically cut down on the chances of experiencing any disastrous problems.

Compare car insurance policies today! Just enter your zip code below to get started for FREE!