You’ve canceled your car insurance policy. Your vehicle is no longer insured. Do you have to turn in your license plate when you cancel insurance? Or can you keep your license plate without issue?
Today, we’re explaining everything you need to know about turning in your license plate when you cancel car insurance.
Car Insurance is Different from Car Registration
First, let’s clarify something. You get a license plate for your vehicle when you register your vehicle with the DMV. Your license plate is linked to your vehicle registration. It is not directly linked to your car insurance.
When you buy car insurance, you will receive proof of insurance documentation. When a police officer asks for proof of insurance, you can show this documentation.
However, there is some connection between your car registration and car insurance. Your insurance company is required to communicate with the DMV regarding your insurance status.
You Are Required to Cancel your Registration and Surrender your License Plate in Certain Situations
Specific rules can vary between states. However, you must cancel your registration and surrender your license plates if:
- You have dropped vehicle liability insurance for any reason. It’s recommended that you surrender your plates before you cancel insurance.
- You have sold or got rid of a vehicle and do not plan to use the plates on another vehicle.
- Your vehicle will be stored or be undergoing repairs for a lengthy period of time and you do not want to maintain liability insurance or registration during this time.
Certain states require you to keep your plates and use them or turn them into the DMV. Generally, you have 30 days or 60 days to use the plates on another vehicle (30 days for a specialty plate and 60 days for an ordinary plate). If you have gone beyond this 30 day or 60 day period without registering a new vehicle, then you are required to surrender your plates.
Rules vary between states. Check with your state’s DMV to verify you need to turn in your license plate.
How to Surrender a License Plate
If you cancel insurance without planning to renew it, then you may be required to surrender your license plate.
Typically, you can turn in a license plate at a number of different state agencies – including your DMV or a local tax collector’s office. Your state’s Department of Revenue should have a list of tax collector’s offices in your area.
After surrendering your plate, you should receive a receipt showing the date your license plate was surrendered.
You may even receive a refund on your vehicle registration fees. If you paid $150 to register your vehicle for the year, for example, and canceled your registration after 6 months, then you might receive a refund of $75.
You May Need to Surrender a Plate to Cancel Car Insurance
Some insurance companies and some states require you to surrender a license plate before canceling car insurance.
In order to cancel your car insurance policy, you first need to submit proof of surrendering your license plate.
Go to your local DMV or tax collector’s office and surrender your plate to receive a receipt. Then, submit the receipt to your insurance company to complete the cancelation process.
Some states require this process to reduce the number of uninsured drivers. They don’t want you to cancel your car insurance and then drive to the DMV in an uninsured vehicle to surrender your plates.
Insurance Companies Are Required to Submit Coverage Details to the DMV
Your car registration and car insurance are connected in some ways. Most importantly, your car insurance company is required to electronically transmit insurance coverage details to your state’s DMV.
Generally, insurance companies have 30 days from the date coverage begins and ends to transmit insurance information. The DMV enters this insurance information into a database. That database includes your vehicle’s license plate number, insurance status, and other details.
All states require you to carry some form of liability insurance. If you cancel your car insurance and do not immediately obtain coverage, then your registration will also be canceled. Even a one-day lapse in coverage can lead to a registration suspension in certain states. Laws vary between states but driving without insurance is illegal in every state.
DMVs May Charge a Lapse Fee
States have different laws regarding lapsed coverage. Many states, however, charge a lapse fee. You may be charged a fee of $25 to $50 if the DMV receives notice that your auto insurance is lapsed.
In some states, for example, you will be required to pay a lapse fee if you do not obtain new auto insurance within 10 days of canceling your old auto insurance. If you do not pay this fee within 30 days, then the DMV can suspend your vehicle’s registration.
Some states even charge a daily lapse fee for every day your vehicle goes without coverage.
Generally, you are required to return your license plates to the DMV when canceling car insurance. Some states require you to turn in your license plate and cancel your registration before canceling your car insurance.