Can an Insurance Company Suspend Your License?

Having your driver’s license suspended can be an extremely disruptive and stressful experience. Unfortunately, many drivers find themselves facing suspension without fully understanding how it happens or who has the authority to suspend a license. This article will provide a comprehensive overview of license suspension, including whether or not an insurance company can suspend your license directly.

What is License Suspension?

Driver’s license suspension refers to the temporary withdrawal of driving privileges by the state licensing agency. It’s essentially illegal to drive when you have a suspended license.

There are many potential reasons why a license could be suspended, such as:

• Accumulating too many points on your driving record from traffic violations and accidents
• Failing to pay traffic fines or appear in court
• Committing serious offenses like DUI or vehicular manslaughter
• Failing to maintain proper insurance coverage
• Failing to pay child support
• Fraudulent license application

Suspension periods can range from 30 days to several years depending on the circumstances. In some cases, licenses can be revoked permanently.

The Suspension Process

Suspensions don’t happen immediately or randomly. There is typically a process that must be followed:

• Notice – The driver will receive advance written notice from the state DMV/MVC indicating the intent to suspend as well as the reason.

• Temporary License – In some cases, the driver may be issued a temporary license that is valid for a short period before the suspension takes effect.

• Administrative Review – Drivers usually have the right to an administrative review or hearing to contest the suspension before it is imposed.

• Reinstatement – Once the term of the suspension has expired, the driver must apply for reinstatement and pay any required fees before driving privileges are restored.

• Appeal – Drivers can appeal the suspension in court in certain situations.

Can an Insurance Company Suspend Your License?

The short answer is no. Insurance companies do not have the authority to directly suspend anyone’s driver’s license.

Suspending driving privileges is a government function that is strictly handled by state agencies like the DMV or MVC. Insurance companies have no power over licensing in this regard.

However, insurance companies can sometimes indirectly lead to suspensions under certain scenarios:

• Reporting high-risk drivers or violations to the DMV
• Failing to provide evidence of insurance during an investigation
• Failing to pay for damages/injuries to another driver

While they may play a role in triggering a suspension, the final decision always rests with the state. No insurance company can unilaterally suspend your driving privileges.

How Reporting Works

In most states, insurance companies are required to report certain high-risk drivers and serious violations to the applicable government licensing agency.

For example, if a policyholder is convicted of DUI, receives multiple traffic tickets, or is deemed responsible for a major at-fault accident, the insurer may be obligated to pass this information along.

The DMV can then decide independently if administrative action like suspension is warranted based on the report from the insurance company. But again, the insurance provider itself does not determine the outcome.

Lack of Insurance Coverage

There are mandatory minimum insurance requirements in every state. Drivers must be able to provide current proof of valid coverage if requested by authorities.

If you are unable to show adequate insurance during a traffic stop or accident investigation, your license could ultimately end up suspended for being uninsured. But it would be the result of government action rather than the insurance company directly suspending you.

Failure to Pay Claims

Here’s another common example – if you cause an accident and your insurance provider denies the claim or refuses to pay the other driver, that driver may be forced to take legal action and sue you directly to recover their losses.

If you fail to pay court-ordered damages from the lawsuit, the state can suspend your license for being non-compliant. But it’s the DMV actually suspending you rather than the insurance company.

Other Ways Suspension Occurs

Beyond insurance-related scenarios, here are some other common triggers for license suspensions:

• DUI conviction
• Habitual traffic offenses and points accumulation
• Failure to appear in court or pay traffic tickets
• Failure to pay child support
• Failure to maintain proper insurance
• Using a fake or fraudulent license
• Voluntary suspension due to medical reasons

Contesting Your Suspension

Since insurance companies themselves don’t actually suspend licenses, you can’t dispute the suspension directly with the insurer if you believe it is invalid or improper. However, you do have options:

• Request an administrative hearing and present evidence to the DMV explaining why the suspension should not be imposed.

• File an appeal through the court system – you may need an attorney for this option.

• For insurance-related suspensions due to lack of coverage or unpaid claims, work with your insurer to provide proper evidence of coverage or settle the claim dispute to avoid suspension.

• Seek a temporary restricted license that allows you to drive under certain conditions while contesting the suspension.

• Request an occupational license if the suspension severely impacts your ability to work.

Avoiding Suspension

The easiest way to avoid license suspension is to always follow the rules of the road and maintain proper insurance coverage on your vehicle. Here are some safe driving tips:

• Obey all traffic signs, signals, and laws
• Don’t speed, tailgate, or drive recklessly
• Avoid distractions like cell phones while driving
• Never drive impaired under the influence of alcohol or drugs
• Take defensive driving courses for insurance discounts
• Pay all tickets and fines promptly
• Show up for all court hearings
• Maintain at least the minimum insurance requirements
• Report any incidents to your insurance provider immediately

What to Do if Suspended

If you find that your license has been suspended, here are the next steps:

• Stop driving immediately – it is illegal to drive with a suspended license.

• Notify your insurance company – let them know you can no longer legally drive.

• Check the reinstatement requirements – understand what you must do to get your license back.

• Consider appealing – if you believe the suspension was unjustified or improper, consider an appeal.

• Seek alternate transportation – arrange other means of transportation like public transit, rides from others, taxis, etc.

• Limit risks – avoid activities that may increase your suspended license suspension period.

• Pay reinstatement fees – regular fees are around $60 but can be over $500 for serious offenses.

Suspension Can Have Serious Consequences

Driving with a suspended license is against the law. If caught, you could face:

• Extended suspension period
• Large fines up to $1000
• Vehicle impoundment or immobilization
• Jail time

You also likely won’t have valid insurance coverage if you drive on a suspended license. This could leave you fully responsible for damages and injuries to others if you cause an accident.

Overall, license suspension should never be taken lightly. While insurance companies cannot directly suspend your driving privileges, they can take actions that initiate government suspension proceedings in some cases. Understanding the process and contesting unjust suspensions is crucial. Always maintain safe driving habits and proper insurance to avoid suspension.

Conclusion

Having your license suspended can severely disrupt both your personal and professional life. While insurance companies play a role in reporting information that may trigger a suspension, only the DMV or court system has the direct authority to withdraw driving privileges. If you believe a suspension is invalid or improper, be sure to contest it through administrative and legal channels. With sound driving practices and adequate insurance, most drivers can avoid the hassle of suspension entirely.