Many people have financial issues and let their automobile insurance lapse. Some people forget to make a payment. Others sell or trade in their cars, but do not turn in their tags. In the case of an insurance lapse, there are large fines imposed by the Motor Vehicle Administration.

The MVA will fine you $150.00 for the first 30 days that you do not have insurance and then $7.00 per day thereafter. I have had clients whose insurance lapsed for two years which is a fine of over $5,000.00. To make matters worse, interest and penalties accrue and the matter is sent over to the Central Collections Unit if you do not pay the fines. The MVA will not negotiate a reduction for financial hardship alone.

If you cancel your insurance or your insurance lapses, your insurance company is required to notify the MVA. The MVA will then send you a letter giving you a certain period of time to provide proof of insurance. If you fail to do so, they will begin collection efforts and demand payment. If you fail to pay it, they will suspend the registration of your vehicle.

If you sold, traded in, or your car was totaled and you failed to turn in your tags, you can provide proof to the MVA and they may eliminate some or all of the fees. They will not take your word for it. They will want to see proof such as a bill of sale, junkyard receipt, or total loss report.

If your insurance lapses, you should immediately get your insurance reinstated or turn you tags into the MVA to stop the fines from accruing. The MVA may be willing to allow you to do a payment plan on the fines that are due. Do not ignore the insurance lapse or the matter will only get worse.