Penalties for using fake car insurance vary from state to state but can include arrest, fines, license suspension and increased insurance costs once the person does buy insurance, as stated by CarsDirect.com. Fake insurance cards can be bought for a fee, but the fees and costs of getting caught far outweigh the cost of buying actual insurance.
Most states have their own databases that can give police immediate access to verify if the insurance card they have been provided is current and real, notes CarsDirect.com. When people are caught with fake insurance they can be given a very large ticket and possibly need to go to court to resolve the matter. Some states immediately seize the driver's license and vehicle if there is not another licensed and insured driver in the car at the time.
Fines for having fake insurance can get very expensive, but on top of those fines, drivers may have to pay additional premiums on their real insurance for things like an SR-22, which is a type of insurance that reports to the government to verify that drivers have made their payment. These requirements can last for several years depending on the courts' decisions in the cases. The base fees for insurance can go up as well, even without additional court requirements added, making it more affordable to just have real insurance from the start.