Louisiana Insurance Commissioner Jim Donelon has condemned a move by the state Office of Motor Vehicles that hit Louisiana citizens with 1.2 million debt collection notices related to lapsed auto insurance.
The OMV in October sent letters to Louisiana drivers with lapsed insurance, warning them a collections agency might be deployed if fines of up to $525 go unpaid. The state hopes to collect $444 million in outstanding debts, the Associated Press reported.
The Louisiana Department of Insurance has received numerous inquiries and complaints from constituents about the notices from the OMV, but it has no authority to resolve the complaints or provide information to consumers to help them prove whether their vehicles were insured or not, the department said.
The AP reported that the mail blast is the first effort by the OMV to capitalize on a new provision of a law allowing the department to collect money through the two-year-old Office of Debt Recovery, the state’s collection agency of sorts.
Rep. Barry Ivey, R-Baton Rouge, authored the new part of the measure this year. But the flood of letters is being derided as a money grab by a state thirsty for dollars.
“These notices are an attempt by the Jindal administration to plug a hole in the state’s budget.” Donelon said in a statement released by the insurance department.
“Yes, we want all drivers to be insured because when more drivers are insured, auto insurance rates can go down. But the way that this has been handled is fundamentally unfair. For years the state has failed to collect fines. 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 said. “How can any reasonable person defend themselves from an alleged infraction 10 years ago? And why should any of us assume that the records are accurate and correct?” Donelon asked.
Col. Mike Edmonson, head of the State Police, which oversees the OMV, said the solicitations are an honest effort to recoup liabilities owed. Some drivers, he said, knowingly allow their auto insurance to expire and continue to drive in Louisiana, which isn’t allowed.
Until now, the OMV didn’t have a way of collecting the money through the Office of Debt Recovery, he said.
“If we didn’t do anything, people wouldn’t pay anything,” he said.
Even though some penalties arise from infractions as far back as 1986, the debt doesn’t disappear, he said.
Donelon said the department has contacted the OMV about the letters.
We “have been told they are making adjustments to better handle consumer calls but in the interim, consumers can also call the Governor’s office,” he added.
An Associated Press report contributed to this story.
Was this article valuable?
Here are more articles you may enjoy.
Investment Funds File New Suits Over Lighthouse Insurance Collapse in 2022 
Trump’s Bond Insurer Tells Judge Shortfall Is ‘Inconceivable’ 
Chubb to Acquire MGA Healthy Paws From Aon 
FBI Says Chinese Hackers Preparing to Attack US Infrastructure From This Issue
