If you’re an uninsured Indiana motorist who hasn’t paid fees demanded of you from the state’s Bureau of Motor Vehicles, beware: Lawmakers are talking about ways to collect.
The Bureau of Motor Vehicles (BMV) recently reported to legislators on the Interim Study Committee on Insurance that about 321,000 drivers owe the BMV a total of around $130 million in insurance-related fees accumulated since 1993. The fees are charged to drivers when they are cited for driving without coverage.
In Indiana, uninsured drivers cited for the first time receive a $150 penalty. Two-time violators are penalized $225, while three-time violators are penalized $300. The BMV also requires a $10 reinstatement fee to lift license suspensions imposed on drivers who fail to pay those fees, according to Elizabeth Murphy, the BMV’s general counsel.
The committee hosted its second meeting on the topic of uninsured drivers last week, continuing from an Aug. 15 meeting where committee members began discussing harsher enforcement methods to help bring down the state’s 16.3 percent uninsured motorist rate.
Murphy said the BMV relies on an enforcement process beginning with notices about lack of coverage followed by license suspensions to stop drivers who are on the road without the proper Indiana car insurance.
“It seemed to be the consensus of the committee that we needed to take a look at the enforcement side of this issue,” said Sen. Travis Holdman (R-Markle), who chairs the committee.
Liens Discussed as Option to Collect on ‘Huge Amounts of Money’
Murphy also laid out the amount of those unpaid fees in recent years:
- $9.6 million in 2010
- “Just under” $11 million in 2011
- $13.3 million in 2012
- $11.4 million so far in 2013.
The average amount owed per driver is $407, according to the BMV.
“What we’ve seen is those individuals who don’t pay—either they can’t pay or they don’t want to pay—they can’t get a court to waive those fees, or they tend to just drive and drive while suspended,” said Murphy.
Several committee members questioned the BMV’s current enforcement methods, with some suggesting using liens.
“It’s just sitting out there?” Sen. Holdman asked about the tens of millions in unpaid fees.
Sen. Frank Mrvan (D-Hammond) said those fees are “huge amounts of money that are laying out there that we never get back.”
“And there’s no law, or the courts or anybody [that] has to report that this money isn’t getting paid back,” he said.
Murphy said that the BMV has not yet explored having a third-party collection agency retrieve those fees.
“We send them notices, their license is suspended, we tell them what they have to do to get their license reinstated. But yes, other than the notices and coming to our office, that’s it,” she said.
Sen. Ed Delaney (D-Indianapolis) said the notify-and-suspend system didn’t seem like enough to get those fees paid.
“The dilemma is as long as they stay out of [the BMV office], they don’t pay the fine,” he said.
Sen. Greg Taylor (D-Indianapolis), who is also senior counsel partner at a finance law firm, said that it “sounds like there’s some value in pursuing these.”
“If somebody owes money and you want to pursue it, there are legal remedies that you can have,” he said. “Liens could be done after you’ve received a judgment. But whether or not Indiana wants to go through that process is something that the BMV is going to have to determine.”
Holdman said he could not think of other municipal fines that “can just sit out there forever.”
“In most cases, you’re going to get a lien on your property, you’re going to get a judgment against you. There’s some kind of mechanism that could kick into place,” he said.
Other Options Discussed Include Plate Confiscation, Point Penalties
A number of other options were discussed, including confiscating the license plates of uninsured drivers.
Oklahoma, which has one of the nation’s worst rates of uninsured drivers, recently created such a program after its insurance commissioner sounded the alarm on uninsured motorists being “one of the most serious issues” for the state.
The committee members in Indiana were split on such an enforcement method.
Indiana Rep. Matthew Lehman (R-Berne) suggested that the BMV institute a way to pardon penalties if violators could prove they complied with BMV policies. Lehman also said he would support plate confiscation, citing staff reports that showed states with lower uninsured motorist rates enforced plate confiscation programs for repeat offenders.
Sen. Taylor said he could back such a program if it was enforced for repeat violators, adding that he was wary of such a program without “clear guidelines” on confiscation and would “not vote for a police officer” determining when a plate could be confiscated.
Steve Duff, from the Independent Insurance Agents of Indiana, told committee members that his organization would support proposals for “enhanced penalties,” including jail time for repeat violators and point-related charges to a motorist’s driver’s license.
Committee Members Seek Further Research on Uninsured Drivers
Sen. Holdman said the complex issue of enforcement on uninsured motorists would be discussed further “until we just kind of beat [the topic] to death.”
He asked committee members to discuss their preferred solutions with the state Legislature’s research staff, which would report on the issue at later meetings.