It depends upon which state you are driving if law enforcement can simply check your license plates or driver's license and determine if you have valid car insurance or if it has been canceled and you are driving without insurance.
Some states have laws and systems in place so that law enforcement has equipment which can verify your car insurance policy is valid when you are stopped for a violation. Some states or jurisdictions may not have the correct system in place or available equipment to check the validity of your insurance card at the time of a violation stop while in others states they have set up a central database that police can check.
For instance, since 2006, California car insurance companies doing business in California were required to electronically report all private-use vehicle (except trailers, off-highway vehicles or boats) liability policies to DMV, both when a policy is issued and/or cancelled. California law enforcement agencies have been able to electronically verify if any private-use vehicle is properly insured by accessing the department's vehicle registration database.
Texas car insurance law has required companies to submit policy information for a database of insured vehicles. The state of Texas then in 2008 put in place a verification system they call Texas Sure. The Texas Sure database includes vehicle registration information, such as vehicle identification number (VIN), owner name and address, and make, model and year, and insurance policy information, such as address, insured drivers, insurance company name and policy effective dates.
Texas Sure is thus a vehicle insurance verification system that allows law enforcement, county tax officials and vehicle inspectors in TX to confirm whether a vehicle in Texas has required personal auto Liability insurance coverage. They can use your license plate number and look up to see if your auto insurance company has submitted information showing that your car insurance was canceled as of a certain date.
Other states such as Ohio currently do not have an electronic verification system for car insurance and thus police are unable to connect to a state database and check on your insurance. Instead they will look at your insurance card to make sure it says your car insurance coverage is in effect and shows you have valid car insurance. Ohio requires you to show proof of insurance in some situations and also randomly selects car owners to prove they have the required auto insurance on their vehicles. This is the verification system that OH currently has since the state has thus far said it is too expensive to change over to an electronic system like CA or TX has in place.
States' Department of Motor Vehicles (DMV) vary on if and how they keep a database of car owner's auto insurance. States also differ on how they verify insurance after a traffic violation. It is important to be properly insured though so that you are not caught without insurance. If you show a police officer an apparently valid insurance card but really are not insured and the police is unable to verify on the spot your car insurance due to not having a statewide database to check, the DMV could still find out that you are uninsured and penalize you at that time.
In most states an insurance company has to notify the DMV if a person's insurance policy is canceled, lapsed or is not valid. When this occurs many states require you to turn in your license plates and if the insurance is not renewed or started up again your driver's license will be suspended. So if your insurance is not valid on your car and your registration has been suspended an officer may find this when they run your plates even if they cannot verify insurance because they should be able to check that your registration is valid with the DMV database.
To find out about your state's insurance verification system contact your state's Department of Motor Vehicles and/or insurance regulator. Either state agency should be able to give you information on this topic and tell you if your car insurance company electronically transmits to the DMV when your policy starts and if it is canceled.
If you are currently without insurance we would advise you not to drive as an uninsured motorist. If you are in an accident you will personally be responsible for the damages and injuries you cause to others plus you can be ticketed for driving without insurance and face severe penalties for this offense. The penalties for driving without insurance range from a fine to jail time, impoundment of your vehicle and even license and registration suspension.