Louisiana Governor Considers Lapsed Insurance Payment Plan Bill

By MEGAN TRIMBLE | June 2, 2016

A Baton Rouge lawmaker’s bid to create payment plans for people struggling to pay unpaid fines from lapsed car insurance coverage is headed to the governor’s desk.

With a 94-0 vote Tuesday, the House gave final passage to the bill from Democratic Rep. Denise Marcelle.

Louisiana law requires drivers to have insurance on their vehicles. Marcelle’s bill outlines payment plans for drivers owing the Office of Motor Vehicles more than $250 in lapsed insurance fines. The state can revoke licenses and seize bank accounts and tax refunds if fines remain unpaid.

The office reports 275,000 drivers are listed as owing fines in more than 550,000 lapsed insurance cases listed in its database that dates back to 1986. Fines range from $125 to $525 for each violation.

The bill outlines six different payment plans, with the largest offering installments for drivers who owe the OMV more than $5,000.

The OMV is currently owed more than $250 million in unpaid fines issued to thousands of drivers with lapsed coverage, according to the OMV.

Supporters say the payment plans will allow those who become insured to reclaim their revoked licenses while repaying their debts.

OMV officials currently have some discretion to develop installment plans and clear cases, but no authority to reissue licenses.

Marcelle’s proposal would not negate the debts, but grant that authority.

In some cases, drivers have said the OMV improperly accused them of having not paid fines when the they didn’t receive collection letters, had already sold the vehicles listed with expired insurance or were registered in other states where they’ve moved. OMV officials have said such cases can be cleared, but drivers must provide the office proper documentation to show they should not have been fined.

As of May 2016, the OMV had collected fines and proper documentation to clear more than 50,000 records, but OMV officials said they are waiting to start the process to collect additional outstanding lapsed coverage penalties until the governor takes final action on Marcelle’s bill.

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