06/30/08 — Stiffer penalties awaiting those who drop insurance

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Stiffer penalties awaiting those who drop insurance

By News-Argus Staff
Published in News on June 30, 2008 1:45 PM

People who habitually drop their vehicle liability insurance coverage will face higher penalties beginning Tuesday.

The change, which results in stiffer penalties for repeated offenses, will affect vehicle owners who have numerous insurance lapses within a three-year period. The new law, passed by the General Assembly in 2007, is the first change in the insurance lapse penalty of $50 since 1957.

The new rates will be:

*$50 for no previous lapses within three years;

*$100 for one previous lapse within three years;

*$150 for two or more previous lapses within three years.

Insurance companies are required to notify the N.C. Division of Motor Vehicles (DMV) within 20 business days after they issue a new or replacement policy, terminate a policy or reinstate a policy.

The DMV then sends a letter to the vehicle owner requiring his response within 10 days. Resulting actions are based on the vehicle owner's response and his record of accidents and financial responsibility.

Owners may face a combination of penalties or revocation of vehicle registration.