Who Pays for Accidents with a Suspended License?

Accidents involving drivers with suspended licenses are all too common. First of all, driving on a suspended license is a crime. In accidents involving a driver without a valid license, fault will most likely be assigned to the driver with the suspended license because had he/she obeyed the law and not driven, the accident never would have occurred. So when someone is driving with a suspended license and has an accident, will his/her auto insurance still cover the damages?

The car insurance coverage for an accident on a suspended driver’s license will depend on two things: state law and the insurance carrier. States have different penalties for unlicensed drivers, which also affect how auto insurance coverage applies. In most states, driving on a suspended license is a misdemeanor, punishable by jail time and/or large fines. Because an unlicensed driver is engaged in an illegal activity when an accident occurs, the car insurer is unlikely to cover the damages, either the driver’s own or those of others.

In fact, most auto insurers automatically drop a policyholder’s coverage when they discover that his/her license is suspended or revoked. Some insurers may allow a grace period of 45 days or so for the driver to obtain a valid license, but others may terminate the policy immediately. Most car insurance policies contain stipulations requiring the insured to have a valid driver’s license at all times or coverage is voided.

The bottom line is you should not be driving on a suspended license. If you have an accident on a suspended license and by some chance your insurer does pay all or part of the damages, you can be sure that you will soon be dropped from coverage afterwards. In that case, you would be virtually uninsurable because of your history. For the most authoritative answer on whether a car accident on a suspended driver’s license would be covered by your insurer, contact a customer service representative or your agent.