The Louisiana Office of Motor Vehicles has collected about $2.2 million in penalties since it sent out 1.2 million letters Oct. 13 seeking $444 million in fines on lapsed auto insurance, a top state official said.
State Police Superintendent Col. Mike Edmonson, who’s in charge of the OMV, said as of Wednesday the agency cleared 29,745 driving records as a result of the mass mailing. Some 69 percent, or 20,562, of those cases were genuine insurance expirations for which people owed fines, while 31 percent, or 9,183, of the violations were absolved after drivers showed proof they shouldn’t have been charged the fee, Edmonson said.
The OMV also refunded $2,200 to drivers who paid fines in error, he said, citing figures he’s expected to present Thursday to the Cash Management Review Board.
“We’re trying to be incredibly receptive to the public,” Edmonson said, citing his extension of OMV’s call-in hours from 8 a.m. to 8 p.m., which is set to continue through Friday. That effort, along with opening several OMV locations across the state last weekend to handle the crush of inquiries about the letters, cost the state about $22,000 in overtime pay, he said.
The mail blast came under criticism last week by drivers and Insurance Commissioner Jim Donelon, who said the move was a “fundamentally unfair” way for the state to collect money on alleged auto insurance expirations, many of which turned out to be mere paperwork glitches for residents who canceled their vehicle insurance after moving out of state or selling their cars.
Edmonson said the OMV was simply acting on information provided by insurance companies, adding that Donelon plays a role in ensuring those records are accurate.
The OMV was hit with 1,500 calls per day in the immediate aftermath of the mailing, but the queries have died down, Edmonson said. Of the 1.2 million letters sent, 176,412, or 15 percent, were returned because drivers no longer lived at those locations, he said.
Edmonson said the reason Louisiana has some of the highest auto insurance rates nationally is because so many of the state’s drivers illegally forgo insurance, putting the burden on those who have coverage.
“Hats off to the people who do pay their insurance. There are a lot of those people out there. We should be doing everything we can to protect those people also,” he said.
The OMV’s missives were the most ambitious push yet among state agencies to capitalize on the state’s 2-year-old in-house collections agency known as the Office of Debt Recovery, said Deputy Secretary of Revenue Jarrod Coniglio. Though all state agencies with outstanding debts are required to use ODR to compel debtors to pay old fines, only the OMV sent such a massive amount of letters, he said.
Some 42 other state organizations have set up agreements with ODR to start going after residents who owe money to the state through new tools ODR provided, he said.
One example of the new mechanism is the Department of Revenue’s ability to locate current bank accounts of debtors who switched banks and seize money from those accounts after proper notification is made, he said.
“We didn’t have a tool before to be able to do this,” said state Rep. Karen St. Germain, D-Plaquemine, referring to OMV’s use of a legal provision she supported this year that spelled out the definition of so-called “final delinquent debt” and spurred the OMV’s mailing.
“There’s so many great people who pay (auto insurance), and there’s so many people who owe that we needed to do something to get this all straight,” said St. Germain, who chairs the Transportation, Highways and Public Works Committee.
The millions in fines gathered in the past couple weeks show “the influx of people who are more than willing to pay, but maybe were a little afraid of what the process would be,” she said.
“But it’s not scary. We’re having people here to explain, here to talk. They’re working overtime.”
Follow Maya Lau on Twitter, @mayalau.