In Pasco County tax collector’s offices, we have seen instances in which auto insurance policy cancellations have had a negative, and sometimes disastrous, impact on both sellers and buyers of vehicles.
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More often than not, those who transact the sale privately are the most at risk of paying a steep price for not properly completing the sale. The danger is that a driver’s license suspension can occur without the vehicle owner even knowing about it until it is too late. By then, hefty fees and fines will most likely be levied against the owner, which can cause great hardship.
Please allow me to illustrate. Mr. A purchases a car from Mrs. B for a certain amount of money. Mrs. B accepts the cash and signs over the title to the vehicle to Mr. A. Mrs. B then calls her insurance company and cancels or removes the vehicle from her policy since she no longer "owns" the vehicle. However, for whatever reason, if Mrs. B does not take the step of notifying the Tax Collector’s Office of the transaction, she will continue to be the owner of record for the vehicle. Mrs. B has the option of bringing in or mailing the upper portion of her title to our office or surrendering her plate. Ideally, both buyer and seller should come to our office together to complete the transaction. This is the course of action I recommend.
By law, insurance companies must notify the state of any auto insurance cancellations that may occur. The state runs the cancellation list against the list of registered vehicle owners, and in this case finds that Mrs. B still "owns" the vehicle, even though she sold it weeks before. The law requires that the driver’s license of the owner of an uninsured vehicle be suspended pending reinstatement of the policy. Usually, the suspension becomes effective within 40 days of the insurance cancellation. The most important thing to remember is do not cancel the insurance until the title/registration transfer is complete.
Once the suspension occurs, as in this scenario, it is very possible that Mrs. B will be driving around with a suspended license. Once notified of this fact, she will need to pay a hefty reinstatement fee to clear her record. If she is pulled over for speeding or some other infraction, she most likely will be cited for driving with a suspended license. Her lack of knowledge of the suspension is not a defense.
In addition to the reinstatement fee, she will have to pay a large fine. The legal and financial costs are high, as well as the time she will have to spend to clear her record.
To reiterate, all of this could have been prevented had the buyer and seller come into the Tax Collector’s Office together to transfer ownership, the top portion of the title had been sent or brought to our office, or the plate had been brought in. A small investment of time can prevent a large amount of grief and expense.
Mr. A, the buyer, also must have insurance for the vehicle on the day he attempts to register it or have the title transferred into his name. If he claims he has insurance but does not, or cancels his policy once the registration is issued, like Mrs. B above, he also faces the likelihood of having his driver’s license suspended. Again, a lack of knowledge is not a defense.
I encourage everyone who engages in a private vehicle transaction to take the time to properly register the vehicle, transfer the title, maintain proper insurance and generally be aware of the status of your driver’s license, especially when insurance coverage is concerned. State law has been changed in recent years, with the goal to stop those who cancel their policies soon after registering or titling a vehicle.
There was a time when drivers could get away with this practice, but that is now ancient history. No matter which side of the transaction you are on, please protect yourself and take the necessary steps to ensure that your license will remain in force. You will be glad you did.
If you have any questions or need additional information, please contact our call center at (727) 847-8032, (813) 235-6076 or (352) 521-4338. Representatives are available from 8:30 a.m. to 5 p.m. Monday through Friday. Mike Fasano is the Pasco County tax collector.
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