Suspended license? Indiana lawmakers commit to ‘fix’ BMV insurance verification notices

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Hundreds of Hoosiers each year unknowingly have their licenses suspended after auto accidents—specifically for failing to respond to the Bureau of Motor Vehicles’ mailed requests for insurance verification.

Now, Indiana lawmakers are contemplating a bill to fix what they call a “due process” flaw in the BMV communication process.

Senate Bill 19, authored by Sen. Dan Dernulc, R-Highland, would require the Indiana BMV to send a copy of its “proof of financial responsibility request” to the insurance carrier identified in the most recent registration for a vehicle involved in an accident. It also creates a mechanism for Hoosiers to request an administrative hearing to show proof of insurance before their license can be suspended.

Currently, the SR22 notices are only mailed to the person involved in the accident. State statute requires First Class postage, though some who testified at the Statehouse on Tuesday questioned whether all letters are sent in that fashion.

Those who receive the notice are responsible for requesting that their insurance provider file electronic proof of insurance with the BMV within 90 days. Failure to do so results in an indefinite license suspension. Proof of financial responsibility is the key to reinstating driving privileges.

“What it comes down to, specifically, is your license being suspended because of a fender bender or an accident that might have happened. And I know personally. It has happened to me, where I had a fender bender and my license was suspended,” Dernulc said, adding that he didn’t know about the suspension until he renewed his insurance some time later with a different carrier. “I think there’s a little bit of due process that needs to be involved with the citizens. Citizens do not need to show their innocence on this.”

Some say they never saw BMV letters

Cody Eckert, the BMV’s legislative director, told lawmakers the state agency sent over 136,000 financial responsibility notices in 2020. That number jumped to 173,000 notices in 2021 and more than 176,000 mailings in 2022.

He added that the BMV additionally processes approximately 200 “material error reviews” annually related to suspensions stemming from financial responsibility requests after crashes.

Among those affected was John Reed, a Munster attorney who testified Tuesday morning before the Senate transportation committee.

Reed recalled his June 2022 car accident in Gary, after which he immediately provided his car insurance information to responding police officers.

The attorney said a collarbone injury sustained during the crash led to months of medical issues and multiple surgeries, likely causing him to overlook a letter from the BMV to verify his insurance.

“I don’t know if I received it. I probably did. I’m not saying the state didn’t send it—but I never recall seeing some sort of notice,” he said.

Six months later, Reed was pulled over for speeding. That’s when he said a police officer informed him that his license was suspended.

“I’m an attorney. I don’t know anything about my license being suspended, which seems kind of strange,” said Reed, whose car was towed.

“It was arduous,” he continued, referring to the process to reinstate his license. “It was a lot of phone calls and a lot of hustling and a good amount of money. And I didn’t do anything wrong. I was punished for—I guess—failure to respond to a notice to prove I was innocent of a crime that I did not commit.”

In all, Reed said he was out at least $500, despite having “done nothing wrong” and being “continuously insured” his whole life.

“The issue that I have, I guess as an attorney and a citizen, is that when I have done nothing wrong, I’m put in a position to prove my innocence—in other words, that I had financial responsibility,” Reed said. “I have to prove I didn’t break the law. And in America, generally, that’s not how we do it.”

Dernulc said Reed’s story was part of the impetus for the bill. Court records show that a related complaint filed by Reed against the BMV is still pending.

Bill still in the works

Dernulc’s bill earned positive reactions from multiple lawmakers on the Senate committee, but many cautioned that certain elements of the proposal need to be reworked.

Eckert, with the BMV, said the agency is currently neutral on the legislation. He advised, though, that the Senate bill would double the mailing requirement for the BMV, costing at least an additional $106,000 per year. The current policy draft requires requests of financial responsibility to be sent to insurance companies, as well as parties involved in the auto accident.

Given that insurance policies often last for six months, Eckert additionally worried that “a good portion” of the notices the BMV would be required to send may be out of date.

“It’s an understandable frustration for drivers to incur suspension while adequately covered, and the BMV would be happy to work with the General Assembly to mitigate those circumstances,” Eckert said.

John Zarich, representing the Insurance Institute of Indiana, doubled down on those concerns and further noted that—under the terms of the current bill draft—insurance carriers could inadvertently provide the BMV with inaccurate information.

“When we would get that notice to verify insurance for this particular individual who listed a particular insurance carrier on the registration, we may end up actually providing back that we have no record of this person as being insured, and so this would actually require us to provide a notice to the BMV, essentially, that the person is uninsured,” Zarich said. “That may not be true. They may have just very likely switched out insurance carriers. And so that’s what we want to work to avoid.”

Zarich proposed the BMV should also be required to send out a notice to affected Hoosiers indicating whether their insurance carrier of record confirmed financial responsibility.

Others emphasized a need for more consistent electronic communication from the BMV.

“I’m getting all of my notices electronically,” said Sen. Mark Messmer, R-Jasper. “If I get a suspension or an insurance verification request, I sure as heck would rather get it through that same mechanism that I’m getting all my other notices from the BMV than relying on the First Class Mail.”

Committee chairman Sen. Mike Crider, R-Greenfield, agreed the issue needs addressed, but said more work is needed on the bill. He held the measure without a vote, giving Dernulc additional time to work on new language.

If the legislation advances, it must still get the greenlight from the Senate Appropriations Committee, given the expected financial impacts on the BMV.

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.

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3 thoughts on “Suspended license? Indiana lawmakers commit to ‘fix’ BMV insurance verification notices

  1. Blind spot here … If a person involved in an accident is able to provide proof of insurance to the responding officer, why does the BMV have to also do insurance verification?

  2. Great question Joe. I am so glad to see our legislature actually doing something to help regular people. Since they are too busy to fix the property tax problem. This happened to our daughter when she was rear-ended in an accident. No notification from the BMV just a letter her license was suspended for not responding. Same happened to my business partner. We have insurance, it’s on our registration, why does the BMV need proof again. Especially when an accident is not your fault.

  3. Happened to me. I have insurance, same agent for 20 years at time of accident (someone ran a red light and hit me). Showed insurance to officer, told my agent what happened, filed claim, paid out, etc. The whole process. Maybe 6 months later I get a call from my agent “your license has been suspended for failing to show proof of insurance”. I was confused as could be, then I learned that officers no longer “check” insurance for a reason of notifying the BMV, apparently that was too much. So the BMV started doing it. Never received a letter, etc. Pain in the behind to get sorted out, even with an amazing insurance agent.

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