OMV letters raise money (and hackles)

The Louisiana Office of Motor Vehicles mailed 1.2 million debt collection letters to drivers for lapsed car insurance coverage.
Some debts are allegedly dated as far back as 1986.
And some recipients are angry about it.
Insurance Commissioner Jim Donelon said an Iraq war veteran contacted him about receiving a cancellation notice.
The veteran was fined $600. At the time, she was deployed for active duty overseas when the service member’s car insurance expired.
The cancellation notice comes now 10 years later without the vet’s ability to confirm whether the state’s claim is correct.
“Yes, we want all drivers to be insured because when more drivers are insured, auto insurance rates can go down,” Donelon said. “But the way that this has been handled is fundamentally unfair.
“For years the state has failed to collect fines,” Donelon said. “Now, years later, the average citizen likely does not have the documents to prove that they had insurance one way or the other.
“No one keeps proof of insurance from a decade ago.”
Donelon, who said the Bobby Jindal administration is going after the fines to plug budget holes, also said the [Jindal] administration also retroactively applied a recent increase in the penalty for not having insurance to people whose alleged infractions happened before the Legislature voted to increase the penalty.
Donelon has been in contact with the Office of Motor Vehicles. He was told OMV is “making adjustments to better handle consumer calls.”
OMV “added phone lines and lengthened hours to help people clear up any penalties,” said Associated Press. “Ten OMV offices around the state will be open Saturday for drivers seeking to remedy their collection notices.”
Donelon suggests consumers call the Governor’s office.
According to the Associated Press, debt collection letters sent in October were seeking as much as $444 million in fine payments from approximately 550,000 drivers.
If a driver receives an official notice of cancellation of liability from the OMV, he or she is required to provide proof that insurance was in effect at the time of cancellation, according to the Office of Motor Vehicles website.
Options for rectifying lapsed insurance issues are:
1. Drivers must surrender the license plate assigned to the vehicle within 10 days from the date of the official cancellation notice.
2. Insurance cancellations can be cleared without a fee if drivers show proof of compliance. In addition, there must be proof that the car was discarded within 10 days of canceling insurance.
3. A fee will be due if required documentation is not provided.
Non-compliant fees will be assessed according to the following fee schedule:
—Up to 30 days, $125.
—31 to 90 days, $275.
—91 or more days, $525.
If drivers have multiple insurance cancellations, a reinstatement cap of $850 will apply for those choosing to clear out all debts on the same day. Additionally, there is an administrative fee of $25 for each cancellation record.
The cap only applies to cancellations not sent to the Office of Debt Recovery.
“Members of the Cash Management Review Board stressed drivers needed to understand their options for responding to the letters and making their case if they feel improperly charged,” said an AP news story.