21 Nov Lawsuit over fine for lapsed auto coverage
If you think car insurance is expensive, then you’d probably be surprised to learn how much more costly it is when you let your automobile coverage lapse.
Louisiana has still financial penalties for drivers who go periods of time without car insurance. Here are the reinstatement fees in Louisiana:
- If you are uninsured for 1-30 days, the fine is $125.
- The fine increases to $275 for going 31-90 days without insurance.
- It goes up to a whopping $525 if you let your insurance lapse for more than 90 days.
- In some cases, the state of Louisiana can charge you up to $850 in reinstatement fees.
- The state’s Office of Debt Recovery can take money directly from your bank account, take your tax refund, and even suspend your driver’s license.
Hundreds of thousands of Louisiana drivers learned the hard way just how expensive these lapses can be, when the state in 2015 tried to collect an estimated $444 million from people who had racked up insurance lapse fines with the DMV.
The state was strapped for cash, so officials turned to Louisiana drivers to pay up. Some of those drivers were being billed for insurance lapses that occurred in the 1980s. In all, the state sent out more than a million collection letters, even to people who had proof that their vehicle insurance had never lapsed.
The state’s money-grab prompted one woman to file a lawsuit against the DMV for what she claimed was hundreds of dollars in illegal overpayments. It even sought class-action status to represent the hundreds of thousands of Louisiana residents who got collection letters from the state in 2015. The status of that lawsuit is unclear, but it’s not uncommon for lawyers to resort to filing a lawsuit over reinstatement fees.
The Crescent City Law Firm has sued the DMV over exorbitant reinstatement fees, and has been successful in reducing the fine on behalf of the client — and reducing the amount of headache associated with dealing with the DMV.
There are steps you can take to challenge the fines imposed by the DMV — like requesting an administrative hearing — and often these are best handled by attorneys who can do the dirty work for you. Attorneys with experience in insurance law are well-versed in all the rules the DMV has to follow when it tries to revoke your driving privileges and impose fines.
If any of these rules were not followed, you could end up saving money — and time.
The easiest way to avoid the hassle and expense associated with DMV reinstatement fees is to not let your car insurance coverage lapse. But if you did go a period of time without car insurance, and now you’re left owing hundreds of dollars to the DMV, contact Crescent City Law Firm for a free consultation.