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Why Was I Charged a Fee for No Insurance When I Have Had Insurance?

 

 

Question 
For a short period of time this year we had double auto insurance coverage for 4 days. I was issued a fee on my registration renewal and received a suspension of registration notice from the DMV. I am being ordered to pay so I may renew my tags for something that never lapsed. All of the information is matching on the insurance policy (vehicle license plate and vehicle identification number) and DMV record. How can I remove this so that I do not have to pay for something that I never lapsed on? This is unfair and I am getting the run around.

Answer 

This may have something to do with the electronic reporting time requirement for auto insurance companies in California. Allow us to explain...

Insurance companies authorized to sell liability insurance policies to California vehicle owners are required to report coverage information to the DMV, electronically, within the required time frame of 30 days from the date auto insurance coverage is obtained, and 45 days from when insurance coverage is canceled. You can see the time-window is fairly long, and not all insurance companies transfer/update DMV records instantly, or in days, for that matter. A four (4) day lapse of insurance can actually trigger the DMV to suspend a vehicle's registration and mail out a Suspension Notice, and require you to pay a reinstatement fee.

Depending on how often, during a calendar month, an auto insurance carrier sends data to the DMV, the DMV's system may or may not reflect the vehicle's current insurance status. Records may indicate no financial liability coverage when the vehicle is actually insured.

We suspect this may have occurred in your specific case. From the information you've provided, it appears there is nothing of your wrong doing, and you should not be required to pay the suspension reinstatement fee (currently $14.00). You may be able to rectify to situation by speaking with a representative from the DMV's Insurance and Financial Responsibility Unit, but in our experience, more than likely, you'll be advised to take the matter up with your current insurance company; as far as being reimbursed for the reinstatement fee you are required to pay.

In our experience the DMV will not take responsibly for insurance records not being updated in a timely manner. As mentioned, your insurance company has 30 days to report new coverage, and 45 days to report cancelled coverage. It is possible that the previous insurance company you had, immediately notified the DMV about the lapse in coverage, and your current insurance company took several days (maybe even a week or two) to report your new coverage. The DMV will not accept responsibility for this and they will not waive the re-reinstatement fee... but it might not hurt to ask, assuming it doesn't take hours to actually get a hold of a representative on the phone.

We should also mention, you can not remedy this matter at a local DMV field office. They will not be able to help you. Registration suspension matters, due to insurance, are only handled online, by phone, or by mail.

• Why Was I Charged a Fee for No Insurance When I Have Had Insurance?

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