NY: DMV Insurance Confusion

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DMV Insurance Confusion May 22, 2001 Through no fault of yours, the state may determine that you have no car insurance and suspend your right to drive.

It's not much, but it passes inspection, it's fully insured and it's Brian Jamelski's only way to get to work. But last December he was riding a bike. His registration had been suspended, license plates confiscated, because the Department of Motor Vehicles claimed he had no insurance. Brian Jamelski: “I mean, how did I get the registration to begin with? You can't get it without proof of insurance.” DMV demanded a $300 fine.

The fine was even bigger for Lori Benz ... “You have to pay a $400 and some odd penalty, or your registration will be suspended. If you don't pay the registration, we will come take the registration and impound your vehicle.” Lori didn't have that kind of money, besides, she had always had insurance. But how could she prove it? Lori Benz: “I took paper proof of everything to DMV and showed them. They didn't want to see the paperwork. They need something electronically filed from my insurance company.” Finally she paid the $472 fine, instead of her mortgage.

Neither Brian nor Lori was without auto insurance for even one day, yet they got in all that trouble. To find out why, you have to come to Albany where a few years ago, the comptroller did an audit that estimated there were 800,000 uninsured vehicles on New York highways. The state legislature then passed a law that the DMV is enforcing, that insurance companies have to comply with. And somewhere in all that is the trouble. The DMV says the trouble lies with the 400 insurance companies doing business in the state. The new law requires them to keep records up to date -- and to do all this electronically.

Ernest Kitchen, Jr, DMV Consumer Relations: “Ultimately, the insurance company has the legal obligation and must report accurately and timely what the insurance status is of each of the vehicles that are out there.”

Insurance companies say there's a glitch in DMV's new system. That they do file accurate and timely reports, but the information is mishandled in Albany. The general public can't get its hands on the electronic records ... so nothing can be proved ... or fixed.

DMV has reimbursed Lori's money, but like Brian, she's still frustrated. Brian Jamelski: “You know it's not anyone's fault that you're talking to, but you have no place to vent your frustration.”

Here's what you should do if you get a letter from the DMV saying you have no insurance. Call your insurance agent immediately! Only the insurance company can file the necessary information with the state. Follow up until you get it in writing that the matter is resolved.


-- Martin Thompson (mthom1927@aol.com), May 22, 2001

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