I can understand how it happened. It shouldn't be able to happen but I can see how.
The whole exchange on insurance when I bought mine:
Dealer "Did you call and change the insurance over?"
Me "Yes but I don't have the slip yet"
Dealer (checks box on finance form) "Don't need it. Initial here please"
Me "OK"
Dealer "Now let's go swap plates, Mary will show you the features of the car and we are ready to go"
Me "I will put the plates on and what does Mary want to know about the features of the car?"


All in all the insurance conversation consisted of about 10 seconds and some initials. I could have nothing as far as they knew.

When I bought mine, I either had to give proof of insurance or they called my insurance. Can't remember which, but I vaguely remember printing off an insurance slip when I picked up the car.

Yep. I expected to have to provide it and that was why I told them I didn't have it yet. They didn't care. Must be my incredibly trustworthy face.

The whole exchange on insurance for me was:

Dealer: You need to have basic insurance and GAP for the vehicle.
Me: I have none because I don't have the car.
Dealer: Let us go to Progressive and Geico website for the best quote and get it now.
Me: Ok. (We got a good quote from Progressive).
Dealer: This is fine and now lets complete the rest of the paperwork.
Me: Yay.