A car insurance company can report the details of an accident or ticket to the licensing agency that can lead to a suspension, however, only the government licensing agency or a court can suspend a driver's license.
If a car insurance company sues you and obtains a court judgment against you, failure to pay the judgment can result in a suspended license.
The reasons for suspending a driver’s license will be enumerated in a state statute. The most common reasons for a suspension include:
- Driving under the influence of an illegal substance or if your blood alcohol level exceeds the legal limit.
- Some states will suspend a license if you refuse to take a breathalyzer test.
- If you have a certain number of unpaid traffic or parking tickets
- If you have accumulated a certain number of “driving points.”
- Reckless driving charges or conviction.
- Failure to have automobile insurance.
- Other offenses that the State determines warrant a license suspension
In the event your driver’s license is suspended, you will most likely not be able to obtain new vehicle insurance. You can petition for a limited driver’s license if there is a compelling reason that requires you be able to drive such as helping a dependent family member obtain regular medical care or getting to/from work or school if you can prove public transportation is not available.
It will be important to follow the restrictions of the suspension carefully because being caught driving with a suspended license will have harsher penalties. While the license is suspended, it is advisable to maintain the car insurance coverage if other drivers use the car or to protect the car in case of an accident while it's parked.