Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Aug 29, 2020

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Here's what you need to know...

  • An illegal alien is technically considered to be a different driver type by insurance companies
  • In 2003, the state of New Mexico allowed illegal immigrants to obtain driver’s licenses
  • When an insured driver is hit by an illegal alien without a driver’s license or auto insurance, the legal driver is often forced to pay for some damages out of his own pocket
  • Auto insurance companies offering auto insurance to illegal aliens help to offer other drivers financial protection demanded by law

Illegal immigrants can get auto insurance. In 2003, the state of New Mexico allowed illegal immigrants to obtain driver’s licenses. The rationale behind passing the law is that illegal immigrants will otherwise drive without a license.

Drivers must pass a written test and behind-the-wheel test to obtain a state-issued license. While most states continue to deny illegal aliens the right to a driver’s license, some auto insurers offer auto insurance to illegal aliens.

When an insured driver is hit by an illegal alien without a driver’s license or auto insurance, the legal driver is often forced to pay for some damages out of his own pocket. Auto insurance sold to illegal aliens protects other drivers from illegal aliens.

Compare online auto insurance rates for your coverage with the free rate tool! Just enter your ZIP code above!

Table of Contents

Which auto insurance companies will sell coverage to illegal immigrants?

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Some auto insurance companies including Alliance United, Bristol West, Farmers Group, and Infinity P&C sell auto insurance to illegal aliens. Their reason to do so doesn’t concern a moral judgment of illegally living in the United States.

Rather, the auto insurance companies realize that the driving public benefits when more drivers, rather than less, have auto insurance. And, yes, it makes them money. It’s not illegal to purchase auto insurance, even without a driver’s license.

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Why should illegal immigrants be allowed to buy auto insurance?

There are several reasons that many people feel that illegal immigrants should be allowed to purchase auto insurance.

According to Kevin Kalley, author of America Out of Order:

  • About 30 percent of prisoners in the United States’ prisons are illegal aliens
  • About $3 million is spent by U.S. courts to imprison illegal aliens every day
  • In 2006 70 percent of cars registered in the State of Florida were driven by uninsured motorists

Costs of auto insurance increase as uninsured drivers, like illegal aliens, pay a single insurance payment to register the auto, then let the policy lapse until the next registration date approaches.

Illegal aliens in the United States are usually here to work. In order to work, most must have reliable transportation. Illegal aliens purchase cars and often drive them without licenses.

The press reports many car accidents with illegal alien drivers result in an offer to pay off the driver’s damages in cash, if that person has the funds to do so.

The drivers don’t want the legal headaches of police reports or potential jail time that driving without a license entails. Having auto insurance in some states allows the unlicensed illegal alien driver to get off with a more lenient ticket or fine.

Auto insurance companies offering auto insurance to illegal aliens help to offer other drivers financial protection demanded by law. Illegal immigrants pay hefty auto insurance rates and are naturally considered high-risk drivers. They aren’t playing by U.S. Immigration rules. They usually don’t have a driver license!

Other financial institutions, such as Bank of America, offer secured credit cards to illegal aliens without a social security card or other forms of identification. Credit cards are usually secured by an amount equal to the cardholder’s spending limit.

Don’t auto insurance companies stand to lose from insuring illegal immigrants?

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According to Alliance United (which reports that about 5 percent of the company’s revenues come from auto insurance premiums paid by illegal aliens in California), illegal alien drivers report few minor accidents.

Auto insurance policies sold to illegal aliens in the United States (thought to be about 15 million people) are considered a growth market by some insurance companies.

About 40 insurance companies sell auto insurance to illegal alien drivers in California. In 2007, Alliance United insured about 2,500 illegal alien drivers.

They pay approximately 20 percent higher premiums than other high-risk drivers. About 33 million vehicles are registered by the California Department of Motor Vehicles.

“All insurance companies are targets for fraudulent auto insurance claims,” says Brian Duffy, the chief executive officer of Alliance United.

Alliance United and other insurance companies selling to uninsured illegal aliens may be at higher risk for fraudulent auto insurance claims than others selling to the standard insurance market.

Buying auto insurance is part of a financially responsible driver’s auto safety kit. Accidents happen, and even the safest drivers can be hit by an uninsured or underinsured driver.

That’s why comparing your auto insurance rates with quotes from other competitive auto insurance companies can save you money. Get started today by entering your ZIP code below!