Is It Possible to Get Auto Insurance Without a Driver’s License?

Driver's licenses and auto insurance policies appear to be as synonymous as Vin Diesel and fast cars. However, contrary to popular belief, you do not need a driver's license to obtain auto insurance in some states or in certain situations.

"We've discovered that some insurers simply issue policies without requiring any type of driver's license," says Pete Moraga, a spokesman for the Insurance Information Network of California. "That's truly remarkable given that there's no way to verify their driving ability."

Your driving record — and thus your driver's license — helps determine how much you pay for auto insurance in California and other states.

Moraga claims that it is not large auto insurance companies that are tossing policies around like confetti. According to him, the majority of auto insurers in California that sell coverage to unlicensed drivers are small businesses.

"Several of these businesses have identified a niche market that may include undocumented workers who are not permitted by law to obtain a driver's licence," Moraga says. "We discovered that in these cases, the insurance brokers use an international driving license or the insured person's home country driver's license."

Obtaining auto insurance without a driver's license is a crapshoot. When dealing with unlicensed drivers, auto insurance companies have no set standard — they may not even be aware that their policyholders do not have licenses. According to Moraga, there is simply no way to track how much auto insurance premiums are for unlicensed drivers versus licenced drivers.

Auto Insurance Loopholes Abound, Even Without a Drivers License

There are numerous loopholes that allow unlicensed drivers to obtain auto insurance. Three of the most common are as follows:

To Keep Your Vehicle Registered When Not in Use

Unlicensed drivers in some states, such as Texas, can purchase auto insurance simply to keep their vehicle registrations current. This can save drivers the trouble of re-registering their vehicles once they obtain their driver's licenses.

For Disabled People Who Still Need Cars But Can’t Drive

Consumers who do not have a driver's license due to health reasons, such as impaired vision, but have a car title in their name and are listed as the primary driver on an insurance policy, can purchase auto insurance. This is a common occurrence among the elderly. For example, Illinois and New Hampshire will revoke a senior citizen's driver's license based on a failed driver's test at the age of 75, but will allow the driver to keep auto insurance coverage.

To Maintain Continuity of Coverage Discounts or Protect Cars Parked Long-Term

If your driver's license has been revoked, you may want to keep your auto insurance policy active for financial reasons. Customers "want to keep the car covered so they don't lose their continuity discount," according to Moraga.

To Protect Cars Parked Long-Term from Damage or Theft

Some people who are temporarily or permanently without a driver's license may choose to keep their comprehensive and collision coverage in case their car is stolen while parked, a tree falls on it, or they are hit by someone who does not have insurance.

Some States Are Starting to Crack Down on Unlicensed Drivers

Some states have decided that they can no longer turn a blind eye to unlicensed drivers. Montana, New Jersey, Oklahoma, and Oregon are among those states.

In 2008, Oregon passed legislation tightening documentation and identity verification requirements for state residents seeking driver's licenses. However, officials say it is too soon to tell how it will affect the number of unlicensed drivers in the state. According to the Oregon Department of Transportation, drivers must renew their license every eight years.

According to an Oregon Department of Transportation report, the following percentages of unlicensed drivers were involved in Oregon traffic accidents over a four-year period:

  • 2007 — 4.4 percent
  • 2008 — 3.7 percent
  • 2009 — 4.1 percent
  • 2010 — 3.4 percent

However, it does not appear that there are a large number of car accidents in Oregon involving motorists who do not have driver's licenses or auto insurance. According to state officials, the majority of people involved in car accidents involving uninsured motorists have driver's licenses.

A large number of drivers in the United States are unable to meet the basic requirements for obtaining a license. According to the 2011 GMAC Insurance National Drivers Test, approximately 18% of U.S. drivers, or approximately 36 million drivers, failed a written driver's exam.