You will need to discuss this issue with the Arizona Motor Vehicle Division (DMV) however it is likely they will confirm that according to their laws you had a lapse of AZ auto insurance.

In most states now when you obtain insurance the insurance company must notify the DMV and then if you cancel your policy the insurer informs the DMV of this. If you have already purchased insurance with another insurance provider then that information should have also been transmitted to the DMV so that they see there was no lapse in coverage.

What likely occurred in your case is that your AZ insurer notified the Arizona DMV that you cancelled your policy but your new Nevada insurance company did not inform the AZ DMV of your new policy due to it being an out of state policy and likely not part of the NV insurer's procedures to notify an out of state DMV of your insurance policy being started.

Arizona requires that every motor vehicle operated on our roadways be covered by one of the statutory forms of financial responsibility, more commonly called liability insurance. The AZ DMV specifically notes that the insurance must be through a company that is authorized to do business in Arizona.

The Arizona DMV also states that out of state insurance is not accepted. They say that all vehicles registered in Arizona must be insured by a company licensed to do business in AZ. Arizona residents who are out of state (including military personnel), however, may submit a De-Insured Certificate on a vehicle, on a short-term basis.

De-insurance is a method of temporarily not maintaining the required insurance on the vehicle until it is ready to be driven or placed on the road again. A de-insured vehicle will not be suspended due to lack of insurance unless it is driven on the roadways of this state.

The AZ DMV notes that in order to clear a registration suspension due to a lapse in car insurance one would need to provide proof of Arizona insurance at the time of the suspension. If proof cannot be obtained, an SR-22 (for all owners listed on the registration on the date of the suspension) must be obtained from an Arizona-authorized insurance company, and a $50.00 reinstatement fee must be paid. The SR-22 must be maintained for three years from the date of suspension with no lapse in coverage. So it would not appear that your Nevada insurance would be accepted as proof of insurance.

When you moved to Nevada you should have registered your vehicle there when you insured it there. NV law actually requires you to do so. The NV DMV states that new Nevada residents must obtain their driver license within 30 days and vehicle registration within 60 days. The fine for failing to register your vehicle is $250-$500. If you had registered and insured your vehicle in Nevada then you would not have had the issue in Arizona with your AZ insurance lapsing on the AZ registered vehicle.

For free auto insurance quotes for Arizona follow this link.