Most people know the state requires all drivers to carry liability insurance on their vehicles. This is a good thing, as anyone who’s ever been injured by an uninsured driver can tell you. Responsible car owners shouldn’t object to carrying liability insurance, and we expect the state to be able to enforce the regulations it sets up. However, the Department of Motor Vehicles (DMV) has a system for enforcing compliance that can be expensive for those who aren’t aware of how it works. Here’s a brief rundown:
According to Nevada law, when the liability insurance on your car lapses for any reason, you also have to cancel the registration by turning in the license plates. So if your insurance is cancelled for any reason, the moment you no longer have coverage, you need to put your car up on blocks, hitchhike down to the nearest DMV with your license plates in hand and stand in one of their beloved lines. When you get coverage again the next day, you can go to the DMV again (but not in the plate-less car) with your proof of insurance and re-register your vehicle. Then – and only then – are you street-legal again.
The current insurance regulations took effect in 1979, but they were originally done on paper forms and the participation of insurance companies was voluntary. Now the system is computerized, and beginning in 1981, it became mandatory for insurance companies to submit a report of all added, terminated or deleted policies. Each insurance company is required to have its central office send the information electronically to the Department of Motor Vehicles. Information is held for 45 days to see if coverage is picked up by another company. If they see that the vehicle was immediately insured by another company, or that coverage lapsed for fewer than seven days, they don’t take action. But if the computer is not satisfied that you have insurance, the DMV sends out a postcard asking the vehicle’s owner to provide proof of coverage. If they don’t receive a reply within 15 days, they then send a certified letter saying the vehicle’s registration has been rescinded and telling the owner to turn in the plates. In order to re-register the vehicle, you have to pay a $250 fee.
This means you cannot take more than seven days to shop around for insurance, and if your policy is scheduled to expire when you’re on vacation, you’d better pre-pay it to make sure it doesn’t lapse. Even if your car is sitting in your garage while you’re in Europe for a month, it needs to be covered by insurance. Otherwise, the computer will note the break in coverage and you’ll be assessed $250.
Kevin Malone, public information officer for the DMV, said the $250 is not legally a fine, which means you cannot be prosecuted or arrested for failing to pay it. That’s a relief – however, in order to be able to drive your car again, you have to pay what they call “an administrative fee” to cover the costs of canceling your registration, sending out all the notices and reinstating your registration again.
The DMV assumes you have been driving your vehicle around while all this is going on, which is strictly illegal. If you can prove that the car was being repaired or was otherwise not in a driveable condition during the entire period you didn’t have insurance, then the fee is reduced to $50.
“It is very important to keep your address current with the DMV,” said Dana Mathiesen, deputy director of the DMV. If you don’t get the DMV notices and don’t realize that your registration has been cancelled, besides being liable for the $250 fee, you can get a ticket for driving an unregistered vehicle. If you are stopped for some other violation, even a broken tail light, the traffic cop must take your license plates away, and has the option of impounding the vehicle, although this is unlikely unless you were stopped for a major offense such as DUI. Driving with no insurance is a major offense and if you are cited for it, you can be fined and even have your drivers license taken away,
How many people do you think have been caught by the computer for not having insurance and had to pay a fee or either $250 or $50? Here is a startling figure for you. According to Deputy Director Mathiesen, the program brought in $1.7 million during the last fiscal year. Even if everyone paid the maximum fee of $250, that amounts to almost 7,000 people. The program costs about $500,000 to run, which means $1.2 million went into the state highway fund. The DMV and the Highway Patrol get 22 percent of the highway fund, and the rest goes to maintaining roads.
Don’t be one of the 7,000 people next year who falls into the DMV trap. Make sure the DMV knows how to find you, don’t let your insurance lapse, and if you have your car in the shop for an extended period of time, make sure you either keep up the insurance on it or notify the DMV that it’s not being driven.
