Motor vehicle insurance is vital for the protection of yourself, your vehicle, other vehicle drivers and private property belonging to other people. If you are involved in an accident, no matter who is at fault, lack of insurance will automatically bring about a huge fine and possibly some time in jail in most states.

In most cases when applying for a vehicle loan, proof that you have full coverage insurance is demanded before the loan is approved. Unless you have cash to pay for a vehicle outright, you will not be able to purchase it unless you have valid insurance.

After ownership is established, you still will not be able to drive it legally until you have purchased a license plate. To get the license plate, you must show proof that you have insurance on the vehicle.

The license plate is issued by the state in which you reside. A fee is charged by the state for the license plate. (It is renewed at least once a year) The fee is in addition to the cost of the insurance. The numbers and letters on the plate are registered to the vehicle and to you. There is usually a fee to register the plate which is in addition to the cost of the plate and the insurance.

In the instances where you have a license plate from a previous vehicle, most states will allow a change in registration from the previous to the current vehicle, for a fee of course. It will cost a little less than having to purchase a new license plate and pay for the registration. You must still furnish proof that you have insurance. The license plate is then fastened to the vehicle, usually in the back, and signifies that this is a legally insured and registered vehicle. Some states require a license plate in both front and back of the vehicle.

If you are involved in an accident, the investigating agency, state, county or city police will immediately check the license plate to see if it matches the vehicle, the person driving and to see if there are any other legal actions pending that need their attention, such as an outstanding arrest warrant. They will ask to see the insurance papers that should always be in the vehicle. Most people put them in the glove box for safe keeping. If the insurance papers are missing, even if the coverage is current, the driver will be facing a large fine and possibly jail time upon failing to produce them.

Most states take vehicle insurance extremely seriously. You do not have to have had an accident to get in trouble. If you are stopped for any traffic infringement, be it speeding, running a red light, or even changing lanes without a signal, it can trigger the request for insurance and registration papers. The fines levied will be for the traffic infringement and for lack of insurance. You could be facing fines close to $1,000.