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Auto insurance fines spark controversy in Louisiana

Louisiana Office of Motor Vehicles aims to collect on fines that are decades old

Louisiana Insurance Commissioner Jim Donelon is taking aim at the state’s Office of Motor Vehicles. Last week, the agency issued notifications to consumers throughout the state, seeking to recoup millions of dollars in fines for auto insurance lapses. A significant portion of these fines are quite old, with some coming from violations dating back as far as 1986. Notices issued to consumers caused an outcry, which got the attention of the Louisiana Department of Insurance.

State regulators pressure agency to only seek to recoup fines from 2006 onward

Following pressure from the state’s regulators, the Louisiana Office of Motor Vehicles has announced that it will no longer be seeking to recoup fines for auto insurance lapses from before 2006. Approximately 25% of the fines that the agency had looked to recover were from violations before that year. Many consumers had expressed outrage after receiving calls from the agency, wherein supposed agency officials were demanding money, even after consumers had proved that they did not owe any fines.

Agency has had trouble keeping track of auto insurance coverage

auto insurance ride share programA significant portion of those that were accused of having “delinquent debt” had actually sold their vehicles or moved out of the state, which canceled their auto insurance coverage in Louisiana. Some issues concerning the sale of vehicles caused the Office of Motor Vehicles to believe that these vehicles were still operating in the state, but without auto insurance coverage. Though the agency has noted that it does not “arbitrarily do stuff,” the agency has come under fire from the state’s insurance regulators, who believe that the issue of outstanding auto insurance fines was mishandled.

Insurance Commissioner believes that the issue was mishandled

Insurance Commissioner Donelon suggests that the handling of this matter was unfair. Donelon notes that the state’s agency had failed to collect fines for several years and the state may no longer have the necessary documents to prove that drivers owe fines from several years ago. Many drivers do not keep their proof of insurance from a decade ago, which can make it difficult for them to prove that they had auto insurance coverage in the past.

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