Can my license be suspended for an unpaid insurance claim in Florida?

We think people who ask this question are wondering if their license be suspended if they do not pay legal judgment against them arising out of a car accident lawsuit.  Typically, if you injure someone else in a car accident and claim is made against your insurance policy, your own insurance company will try to resolve the claim within your policy limits. However, if the claim is not settled and a lawsuit ensues which you lose,  a judgment will be rendered against you. If you or your insurer does not pay that judgment amount, your driver’s license can be suspended pursuant to Florida law. More specifically:

Florida Statute 324.121 Suspension of license and registration.—

(1) The department, upon the receipt of a certified copy of a judgment, as provided in s. 324.111, shall forthwith suspend the license and registration and any nonresident’s operating privilege of any person against whom such judgment was rendered, except as hereinafter otherwise provided in this section, and in s. 324.141.
(2)(a) If the judgment creditor consents in writing, in such form as the department may prescribe, that the judgment debtor be allowed license and registration or nonresident’s operating privilege, the same may be allowed by the department, in its discretion, for 6 months from the date of such consent and thereafter until such consent is revoked in writing notwithstanding default in the payment of such judgment, or any installments thereof prescribed in s. 324.141, provided the judgment debtor furnished proof of financial responsibility as provided in s. 324.031, such proof to be maintained for 3 years.
(b) If the department determines that an insurer was obligated to pay the judgment but failed to do so through no fault of the judgment debtor, the judgment debtor’s license and registration and any nonresident’s operating privilege shall not be suspended.

At Perkins Law Offices in Miami, we help people who are injured in car accidents. We want to ensure that settlements and judgments are paid by defendant insurance companies.

Can my license be suspended for an unpaid insurance claim? 

The answer is Yes. In addition to unpaid judgments, a driver’s license may also be suspended for unpaid child support, traffic infractions and certain criminal offenses. The Florida Statute pertaining to this is the following:

322.245 Suspension of license upon failure of person charged with specified offense under chapter 316, chapter 320, or this chapter to comply with directives ordered by traffic court or upon failure to pay child support in non-IV-D cases as provided in chapter 61 or failure to pay any financial obligation in any other criminal case.—

(1) If a person charged with a violation of any of the criminal offenses enumerated in s. 318.17or with the commission of any offense constituting a misdemeanor under chapter 320 or this chapter fails to comply with all of the directives of the court within the time allotted by the court, the clerk of the court must provide the person, either electronically or by mail sent to the address specified on the uniform traffic citation, a notice of such failure, notifying him or her that, if he or she does not comply with the directives of the court within 30 days after the date of the notice and pay a delinquency fee of up to $25 to the clerk, from which the clerk shall remit $10 to the Department of Revenue for deposit into the General Revenue Fund, his or her driver license will be suspended. The notice must be sent no later than 5 days after such failure. The delinquency fee may be retained by the office of the clerk to defray the operating costs of the office.
(2) In non-IV-D cases, if a person fails to pay child support under chapter 61 and the obligee so requests, the depository or the clerk of the court shall mail in accordance with s. 61.13016 the notice specified in that section, notifying him or her that if he or she does not comply with the requirements of that section and pay a delinquency fee of $25 to the depository or the clerk, his or her driver license and motor vehicle registration will be suspended. The delinquency fee may be retained by the depository or the office of the clerk to defray the operating costs of the office after the clerk remits $15 to the Department of Revenue for deposit into the General Revenue Fund.
(3) If the person fails to comply with the directives of the court within the 30-day period, or, in non-IV-D cases, fails to comply with the requirements of s. 61.13016 within the period specified in that statute, the depository or the clerk of the court must electronically notify the department of such failure within 10 days. Upon electronic receipt of the notice, the department shall immediately issue an order suspending the person’s driver license and privilege to drive effective 20 days after the date the order of suspension is mailed in accordance with s. 322.251(1), (2), and (6). The order of suspension must also contain information specifying that the person may contact the clerk of the court to establish a payment plan pursuant to s. 28.246(4) to make partial payments for fines, fees, service charges, and court costs.
(4) After suspension of the driver license of a person pursuant to subsection (1), subsection (2), or subsection (3), the license may not be reinstated until the person complies with all court directives imposed upon him or her, including payment of the delinquency fee imposed by subsection (1), and presents certification of such compliance to a driver licensing office and complies with the requirements of this chapter or, in the case of a license suspended for nonpayment of child support in non-IV-D cases, until the person complies with the reinstatement provisions of s. 322.058 and makes payment of the delinquency fee imposed by subsection (2).
(5)(a) When the department receives notice from a clerk of the court that a person licensed to operate a motor vehicle in this state under the provisions of this chapter has failed to pay financial obligations for any criminal offense other than those specified in subsection (1), in full or in part under a payment plan pursuant to s. 28.246(4), the department must suspend the license of the person named in the notice. The department shall mail an order of suspension in accordance with s. 322.251(1), (2), and (6), which must also contain information specifying that the person may contact the clerk of the court to establish a payment plan pursuant to s. 28.246(4) to make partial payments for fines, fees, service charges, and court costs.

(b) The department must reinstate the driving privilege when the clerk of the court provides an affidavit to the department stating that:

1. The person has satisfied the financial obligation in full or made all payments currently due under a payment plan;
2. The person has entered into a written agreement for payment of the financial obligation if not presently enrolled in a payment plan; or
3. A court has entered an order granting relief to the person ordering the reinstatement of the license.
(c) The department shall not be held liable for any license suspension resulting from the discharge of its duties under this section.

Understanding License Suspension Due to Unpaid Insurance Claims and Other Violations

In Florida, maintaining proper insurance coverage and car registration is not just a recommendation—it’s a legal requirement. Failure to uphold this responsibility can lead to suspension of your driver’s license. It should not be hard to maintain your license because Florida has ridiculously low insurance requirements that do not even protect people injured in a car accident by someone else. From a personal injury lawyer perspective whose job is to help injured victims, Florida insurance requirements are minimal and are bad for the consumer. The limits required to drive and own a vehicle are just way too low and do not really protect innocent motorists of negligent and reckless drivers.  Many motorists have no liability insurance at all on their policy because it is not required by law. There is no mandatory minimum bodily injury insurance required in Florida to own and drive a vehicle. There is only a PIP insurance requirement which doesn’t protect the people the negligent driver injures.  All vehicle owners need to be in compliance is to carry minimum liability insurance coverage of $10,000 in Personal Injury Protection (PIP) and $10,000 in Property Damage Liability (PDL). THIS TYPE OF COVERAGE DOES NOT PROTECT PEOPLE INJURED BY THE SOMEONE DRIVING WITH THE STATE MINIMUM. IN OTHER WORDS THAT COVERAGE CANNOT GO TO THE INJURED PARTY”S MEDICAL BILLS OO PAIN AND SUFFERING. IT ONLY WILL PAY FOR THE NEGLIGENT DRIVER’S OWN INJURY.

If you fail to maintain this minimum coverage, your driver’s license and vehicle registration can be suspended. If your insurance lapses or is canceled, your insurance provider is required to notify the Department of Highway Safety and Motor Vehicles (DHSMV) who will will then send you a notice of suspension, giving you a limited time (usually 30 days) to provide proof of insurance. If you fail to provide proof of insurance within the specified period, your driver’s license and vehicle registration will be suspended.Driving without insurance can also result in fines and penalties if caught, in addition to the suspension. If you’re involved in an accident without insurance, your license can be suspended for up to 3 years, and you’ll need to file an SR-22 (proof of financial responsibility) to reinstate it. To reinstate your license and registration, you must get valid liability insurance and provide proof to the DHSMV; Pay a reinstatement fee; & File an SR-22 or FR-44 form if required (e.g., after an accident or DUI-related suspension).

Financial Responsibility Law in Florida

A very important aspect of car accident law is vicarious liability for a permissive driver of a privately owned vehicle. Florida Statute 324.021 governs financial responsibility for private owners of car who allow someone else to drive the car with their permission and that person gets into an accident causing injuries. Essentially, the vehicle owner maybe held legally responsible for the damages to the injured party for up to $100,000 per person/ $300,000 per accident in total. However, if the permitted user of the vehicle is uninsured or has insurance with limits less than $500,000 combined property damage and bodily injury liability, the owner shall be vicariously liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle.  This means the vehicle owner can be held vicariously liable for the negligent acts of a permissive driver regardless of whether the owner was actively negligent.

Title XXIII
MOTOR VEHICLES
Chapter 324
FINANCIAL RESPONSIBILITY
View Entire Chapter

324.021 Definitions; minimum insurance required.—The following words and phrases when used in this chapter shall, for the purpose of this chapter, have the meanings respectively ascribed to them in this section, except in those instances where the context clearly indicates a different meaning:

(1) MOTOR VEHICLE.—Every self-propelled vehicle that is designed and required to be licensed for use upon a highway, including trailers and semitrailers designed for use with such vehicles, except traction engines, road rollers, farm tractors, power shovels, and well drillers, and every vehicle that is propelled by electric power obtained from overhead wires but not operated upon rails, but not including any personal delivery device or mobile carrier as defined in s. 316.003, bicycle, electric bicycle, or moped. However, the term “motor vehicle” does not include a motor vehicle as defined in s. 627.732(3) when the owner of such vehicle has complied with the requirements of ss. 627.730–627.7405, inclusive, unless the provisions of s. 324.051 apply; and, in such case, the applicable proof of insurance provisions of s. 320.02 apply.
(2) DEPARTMENT.—The Department of Highway Safety and Motor Vehicles.
(3) OPERATOR.—Every person who is in actual physical control of a motor vehicle.
(4) PERSON.—Every natural person, firm, copartnership, association, or corporation.
(5) NONRESIDENT.—Every person who is not a resident of this state.
(6) LICENSE.—Any license, temporary instruction permit, or temporary license issued under the laws of this state pertaining to the licensing of persons to operate motor vehicles.

(7) PROOF OF FINANCIAL RESPONSIBILITY.—That proof of ability to respond in damages for liability on account of crashes arising out of the use of a motor vehicle:

(a) In the amount of $10,000 because of bodily injury to, or death of, one person in any one crash;
(b) Subject to such limits for one person, in the amount of $20,000 because of bodily injury to, or death of, two or more persons in any one crash;
(c) In the amount of $10,000 because of injury to, or destruction of, property of others in any one crash; and
(d) With respect to commercial motor vehicles and nonpublic sector buses, in the amounts specified in ss. 627.7415 and 627.742, respectively.
(8) MOTOR VEHICLE LIABILITY POLICY.—Any owner’s or operator’s policy of liability insurance furnished as proof of financial responsibility pursuant to s. 324.031, insuring such owner or operator against loss from liability for bodily injury, death, and property damage arising out of the ownership, maintenance, or use of a motor vehicle in not less than the limits described in subsection (7) and conforming to the requirements of s. 324.151, issued by any insurance company authorized to do business in this state, including, but not limited to, a risk retention group operating in accordance with 15 U.S.C. ss. 3901 et seq., which conducts business in this state pursuant to s. 627.944. The owner, registrant, or operator of a motor vehicle is exempt from providing such proof of financial responsibility if he or she is a member of the United States Armed Forces and is called to or on active duty outside this state or the United States, or if the owner of the vehicle is the dependent spouse of such active duty member and is also residing with the active duty member at the place of posting of such member, and the vehicle is primarily maintained at such place of posting. The exemption provided by this subsection applies only as long as the member of the armed forces is on such active duty outside this state or the United States and the owner complies with the security requirements of the state of posting or any possession or territory of the United States.

(9) OWNER; OWNER/LESSOR; APPLICATION.—

(a) Owner.—A person who holds the legal title of a motor vehicle; or, in the event a motor vehicle is the subject of an agreement for the conditional sale or lease thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of possession vested in the conditional vendee or lessee, or in the event a mortgagor of a vehicle is entitled to possession, then such conditional vendee or lessee or mortgagor shall be deemed the owner for the purpose of this chapter.

(b) Owner/lessor.—Notwithstanding any other provision of the Florida Statutes or existing case law:

1. The lessor, under an agreement to lease a motor vehicle for 1 year or longer which requires the lessee to obtain insurance acceptable to the lessor which contains limits not less than $100,000/$300,000 bodily injury liability and $50,000 property damage liability or not less than $500,000 combined property damage liability and bodily injury liability, shall not be deemed the owner of said motor vehicle for the purpose of determining financial responsibility for the operation of said motor vehicle or for the acts of the operator in connection therewith; further, this subparagraph shall be applicable so long as the insurance meeting these requirements is in effect. The insurance meeting such requirements may be obtained by the lessor or lessee, provided, if such insurance is obtained by the lessor, the combined coverage for bodily injury liability and property damage liability shall contain limits of not less than $1 million and may be provided by a lessor’s blanket policy.
2. The lessor, under an agreement to rent or lease a motor vehicle for a period of less than 1 year, shall be deemed the owner of the motor vehicle for the purpose of determining liability for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and up to $300,000 per incident for bodily injury and up to $50,000 for property damage. If the lessee or the operator of the motor vehicle is uninsured or has any insurance with limits less than $500,000 combined property damage and bodily injury liability, the lessor shall be liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle. The additional specified liability of the lessor for economic damages shall be reduced by amounts actually recovered from the lessee, from the operator, and from any insurance or self-insurance covering the lessee or operator. Nothing in this subparagraph shall be construed to affect the liability of the lessor for its own negligence.
3. The owner who is a natural person and loans a motor vehicle to any permissive user shall be liable for the operation of the vehicle or the acts of the operator in connection therewith only up to $100,000 per person and up to $300,000 per incident for bodily injury and up to $50,000 for property damage. If the permissive user of the motor vehicle is uninsured or has any insurance with limits less than $500,000 combined property damage and bodily injury liability, the owner shall be liable for up to an additional $500,000 in economic damages only arising out of the use of the motor vehicle. The additional specified liability of the owner for economic damages shall be reduced by amounts actually recovered from the permissive user and from any insurance or self-insurance covering the permissive user. Nothing in this subparagraph shall be construed to affect the liability of the owner for his or her own negligence.

(c) Application.—

1. The limits on liability in subparagraphs (b)2. and 3. do not apply to an owner of motor vehicles that are used for commercial activity in the owner’s ordinary course of business, other than a rental company that rents or leases motor vehicles. For purposes of this paragraph, the term “rental company” includes only an entity that is engaged in the business of renting or leasing motor vehicles to the general public and that rents or leases a majority of its motor vehicles to persons with no direct or indirect affiliation with the rental company. The term “rental company” also includes:

a. A related rental or leasing company that is a subsidiary of the same parent company as that of the renting or leasing company that rented or leased the vehicle.
b. The holder of a motor vehicle title or an equity interest in a motor vehicle title if the title or equity interest is held pursuant to or to facilitate an asset-backed securitization of a fleet of motor vehicles used solely in the business of renting or leasing motor vehicles to the general public and under the dominion and control of a rental company, as described in this subparagraph, in the operation of such rental company’s business.

2. Furthermore, with respect to commercial motor vehicles as defined in s. 627.732, the limits on liability in subparagraphs (b)2. and 3. do not apply if, at the time of the incident, the commercial motor vehicle is being used in the transportation of materials found to be hazardous for the purposes of the Hazardous Materials Transportation Authorization Act of 1994, as amended, 49 U.S.C. ss. 5101 et seq., and that is required pursuant to such act to carry placards warning others of the hazardous cargo, unless at the time of lease or rental either:

a. The lessee indicates in writing that the vehicle will not be used to transport materials found to be hazardous for the purposes of the Hazardous Materials Transportation Authorization Act of 1994, as amended, 49 U.S.C. ss. 5101 et seq.; or
b. The lessee or other operator of the commercial motor vehicle has in effect insurance with limits of at least $5,000,000 combined property damage and bodily injury liability.
3.a. A motor vehicle dealer, or a motor vehicle dealer’s leasing or rental affiliate, that provides a temporary replacement vehicle at no charge or at a reasonable daily charge to a service customer whose vehicle is being held for repair, service, or adjustment by the motor vehicle dealer is immune from any cause of action and is not liable, vicariously or directly, under general law solely by reason of being the owner of the temporary replacement vehicle for harm to persons or property that arises out of the use, or operation, of the temporary replacement vehicle by any person during the period the temporary replacement vehicle has been entrusted to the motor vehicle dealer’s service customer if there is no negligence or criminal wrongdoing on the part of the motor vehicle owner, or its leasing or rental affiliate.
b. For purposes of this section, and notwithstanding any other provision of general law, a motor vehicle dealer, or a motor vehicle dealer’s leasing or rental affiliate, that gives possession, control, or use of a temporary replacement vehicle to a motor vehicle dealer’s service customer may not be adjudged liable in a civil proceeding absent negligence or criminal wrongdoing on the part of the motor vehicle dealer, or the motor vehicle dealer’s leasing or rental affiliate, if the motor vehicle dealer or the motor vehicle dealer’s leasing or rental affiliate executes a written rental or use agreement and obtains from the person receiving the temporary replacement vehicle a copy of the person’s driver license and insurance information reflecting at least the minimum motor vehicle insurance coverage required in the state. Any subsequent determination that the driver license or insurance information provided to the motor vehicle dealer, or the motor vehicle dealer’s leasing or rental affiliate, was in any way false, fraudulent, misleading, nonexistent, canceled, not in effect, or invalid does not alter or diminish the protections provided by this section, unless the motor vehicle dealer, or the motor vehicle dealer’s leasing or rental affiliate, had actual knowledge thereof at the time possession of the temporary replacement vehicle was provided.

c. For purposes of this subparagraph, the term:

(I) “Control” means the power to direct the management and policies of a person, whether through ownership of voting securities or otherwise.
(II) “Motor vehicle dealer’s leasing or rental affiliate” means a person who directly or indirectly controls, is controlled by, or is under common control with the motor vehicle dealer.

d. For purposes of this subparagraph, the term “service customer” does not include an agent or a principal of a motor vehicle dealer or a motor vehicle dealer’s leasing or rental affiliate, and does not include an employee of a motor vehicle dealer or a motor vehicle dealer’s leasing or rental affiliate unless the employee was provided a temporary replacement vehicle:

(I) While the employee’s personal vehicle was being held for repair, service, or adjustment by the motor vehicle dealer;
(II) In the same manner as other customers who are provided a temporary replacement vehicle while the customer’s vehicle is being held for repair, service, or adjustment; and
(III) The employee was not acting within the course and scope of his or her employment.
(10) JUDGMENT.—Any judgment becoming final by expiration without appeal of the time within which an appeal might have been perfected, or by final affirmation on appeal, rendered by a court of competent jurisdiction of any state or of the United States upon a cause of action arising out of the ownership, maintenance, or use of any motor vehicle for damages, including damages for care and loss of services because of bodily injury to or death of any person, or for damages because of injury to or destruction of property, including the loss of use thereof, or upon a cause of action on an agreement of settlement for such damage.
(11) REGISTRATION.—Registration certificate or certificates and registration plates issued under the laws of this state pertaining to the registration of motor vehicles.

DRUNK DRIVERS:

The above license suspension laws for failing to maintain required insurance minimums or paying judgments and infractions are considered Florida’s financial responsibility laws. Another financial responsibility law for motor vehicle operators pertains to folks guilty of drunk driving who injure and kill someone in the accident. When or if they get their license back, such people must carrier higher limits of insurance to have a valid license for operating a motor vehicle. The coverage amount is $100,000 per person/ 300,000 per accident. In this personal injury lawyer’s opinion, our every motorist should be required to maintain this minimal amount that drunk drivers are required to carry. The drunk driver financial responsibility law is as follows:

324.023 Financial responsibility for bodily injury or death.—In addition to any other financial responsibility required by law, every owner or operator of a motor vehicle that is required to be registered in this state, or that is located within this state, and who, regardless of adjudication of guilt, has been found guilty of or entered a plea of guilty or nolo contendere to a charge of driving under the influence under s. 316.193 after October 1, 2007, shall, by one of the methods established in s. 324.031(1) or (2), establish and maintain the ability to respond in damages for liability on account of accidents arising out of the use of a motor vehicle in the amount of $100,000 because of bodily injury to, or death of, one person in any one crash and, subject to such limits for one person, in the amount of $300,000 because of bodily injury to, or death of, two or more persons in any one crash and in the amount of $50,000 because of property damage in any one crash. If the owner or operator chooses to establish and maintain such ability by furnishing a certificate of deposit pursuant to s. 324.031(2), such certificate of deposit must be at least $350,000. Such higher limits must be carried for a minimum period of 3 years. If the owner or operator has not been convicted of driving under the influence or a felony traffic offense for a period of 3 years from the date of reinstatement of driving privileges for a violation of s. 316.193, the owner or operator shall be exempt from this section.

Consequences of Unpaid Insurance Claims

When an at-fault driver fails to satisfy a judgment—meaning they do not pay the required amount—the victim can notify the state’s motor vehicle department (DMV) or the appropriate licensing authority. Many states, including Florida, have laws that allow for the suspension of a driver’s license in cases where a judgment related to an unpaid insurance claim has not been satisfied. This process is known as a judgment suspension. The DMV is the authority that must suspend the license.

Steps to Reinstate a Suspended License After an Insurance Claim Judgment

There are steps one can take if their license gets suspended due to an unpaid insurance claim, infraction or violation of certain criminal laws. 1.) Satisfy the Judgment is usually the first step- The primary step is to pay the outstanding judgment in full. This is a no brainer; 2.) Provide Proof of Financial Responsibility- After settling the judgment, you’ll need to provide the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) with certified proof of full liability insurance, typically on Form SR-22, for three years. This ensures that you’re financially responsible moving forward; 3.) Pay Reinstatement Fees- An administrative fee is required to reactivate your driving privileges. In Florida, this fee can be up to $500, depending on the circumstances of the suspension. If you want to maintain your driving privileges, be responsible and pay attention:

  • Maintain Adequate Insurance Coverage: Ensure that you have the required insurance coverage at all times.
  • Address Insurance Claims Promptly: If you’re involved in an accident and you injure someone, work proactively with your insurance company to settle any claims. Keep in contact and follow up with your adjuster or assigned lawyer. Ask for paperwork.
  • Stay Informed: Regularly review your insurance policy and stay updated on Florida’s insurance requirements to ensure compliance.
Can my license be suspended for unpaid Insurance Claim?

Can my license be suspended for unpaid Insurance Claim?

Rated Among the Best Car Accident Lawyers In Florida

Our familiarity with Florida’s Financial Responsibility Laws, allows us to assist our injured clients traverse issues with collecting on settlements and judgments against negligent drivers.

Frequently Asked Questions (FAQs)

Can an insurance company directly suspend my driver’s license?

No, an insurance company cannot directly suspend your driver’s license. However, if you fail to pay a judgment resulting from an accident, the state’s motor vehicle department can suspend your license upon notification.

How long will my license remain suspended if I don’t pay an insurance claim?

In Florida, your license can be suspended for up to three years or until you satisfy the judgment and meet the reinstatement requirements.

What is an SR-22, and why do I need it?

An SR-22 is a certificate of financial responsibility required for drivers who have been involved in certain traffic violations. It serves as proof that you carry the minimum required insurance. In Florida, after a license suspension due to an unpaid insurance claim, you’re required to maintain an SR-22 for three years.

Can I set up a payment plan to pay off the judgment?

Yes, in some cases, you can arrange a payment plan to satisfy the judgment. However, your license will typically remain suspended until the judgment is paid in full or an acceptable payment arrangement is made.

What should I do if I can’t afford to pay the judgment?

If you’re unable to pay the judgment, it’s advisable to consult with a legal professional to explore options such as negotiating a payment plan or seeking alternative resolutions. Ignoring the judgment can lead to prolonged suspension of your driving privileges.

Contact Perkins Personal Injury Lawyers If Injured in a Car Accident

For personalized assistance if you were injured in a car accident or any other type of incident that cause you serious personal injuries or death of a loved one, contact Perkins Law Offices in Miami or Boca Raton. Our experienced attorneys regularly file injury claims and will tell you if you have a case if you provide requisite information. They will tell you what you need to do to ensure you protect your claim and can explain nuances of insurance claims and the possible effect license suspensions on the injury claim.

If you’ve been seriously injured in a Miami car accident, call us to discuss your case. At Perkins Law Offices, we specialize in helping victims of car accidents get the compensation they deserve. Contact us today to schedule a consultation and take the first step toward securing your future.

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