Louisiana drivers face steep reinstatement fees amid high insurance costs

BATON ROUGE, La. —Louisiana drivers contend with some of the highest auto insurance premiums in the nation, averaging $3,953 annually for full coverage—nearly 45% above the national average. This financial strain is compounded by steep reinstatement fees for lapsed insurance, leading to prolonged license suspensions and limited mobility for many residents. See Bankrate .

A state audit reveals that over 80% of reinstatement fees collected by the Office of Motor Vehicles (OMV) in fiscal year 2024—totaling $103.8 million—stemmed from insurance-related suspensions. In contrast, fees for first-time DWI offenses amounted to just $354,100. The minimum fee for insurance lapses is set at $150, with a maximum of $525, surpassed only by Delaware, which imposes no cap. Lawmakers are considering adjustments to these fees, potentially lowering insurance-related penalties while increasing those for more severe offenses.

As of June 2024, nearly 80% of suspended or revoked licenses were due to insurance lapses, affecting 9.1% of Louisiana’s 2.81 million licensed drivers. More than half of licenses suspended in June 2022 remained inactive two years later, and over a third had expired without renewal. Unpaid fees are forwarded to the Office of Debt Recovery, which can garnish wages, withhold tax refunds, or levy bank accounts, adding a 15% surcharge. In fiscal 2024, drivers paid an additional $11.6 million through this process.

In response to financial hardships, lawmakers established a Reinstatement Relief Program in 2024 to reduce fees based on income and financial status. The audit recommends expanding this program to encompass all reinstatement fees and extending the grace period for insurance lapses. Other states, including Georgia and Ohio, offer similar waivers or amnesty for low-income drivers, presenting potential models for Louisiana.