Cancelling insurance without surrendering or deactivating your plates could result in serious penalties.
There are many instances where someone might want to cancel insurance on a vehicle that has active Virginia license plates.
- The vehicle is temporarily disabled due to an accident or mechanical breakdown
- It is being restored
- The owner is no longer driving due to health issues, travel, etc.
In spite of the numerous, reasonable situations where it may seem to make sense to cancel the insurance, be sure you never do it without first deactivating or surrendering the tags.
What is required?
Virginia law requires that in order to register a vehicle and get license plates, you must certify that you maintain liability insurance or pay an fee for registering an uninsured vehicle (which still means that you are PERSONALLY liable for claims, which is why this option is rarely used.)
Unless they are notified otherwise, by surrendering or deactivating your tags, VA DMV will continue to require liability insurance be in force.
What can happen if I fail to maintain insurance?
Vehicle owners who fail to meet their obligations face:
- Suspension of your driving privileges
- Suspension of you vehicle registration privileges
- $500 statutory fee
- $145 reinstatement fee
- 3 years insurance filing (which could cause your rates to increase significantly)
Will the DMV even find out?
Probably. Insurance companies notify the DMV of cancellations, additions, or new coverage.
Oftentimes, we have clients that have not necessarily traded or sold vehicle recently receive letters from VA DMV requesting insurance verification. I don't know if that is just a random thing or what. However, not responding is a bad idea as you run the possibility of facing the penalties outlined above.
So, what should I do if I no longer want to carry insurance?
You have a few options:
- Surrender your plates to the DMV.
- Deactivate your plates.
- Let the plates expire. Then, cancel insurance.
- Carry insurance.
We know it can be a hassle to turn your tags in. However, it is very unwise to mess around in this situation. The VA DMV is serious about enforcing these rules and once you are caught, it is too late to try to explain your way out of it.