How long can a insurance company keep a lien on your driver license?

Answer 1

Most states have Financial Responsibility Laws that require owners and operators of vehicles to maintain liability insurance. Some states allow other ways to show financial responsibility for the payment of damages caused by you to others, such as a bond of some sort.

In general, a license suspension can result from a collision in the following way:

1. Collision results in damages exceeding an amount provided by the Financial Responsibility Law

2. You are ticketed for the collision and convicted of the offense

3. You fail to voluntarily pay the damages resulting from the other car. At that point, the insurer that paid for the repairs of the car that you hit, which has acquired its inured right to collect the cost of repairs, can apply for the suspension of your license. If done then, the suspension is only for a limited period, such as 1 year.

4. If the insurer then sues you to get its money back (a process called subrogation) and wins, a judgment will be entered against you.

5. If the judgment remains unpaid for a stated period of time which varies by state (often, 30 days), the insurer can send a certified copy of the judgment and other court documentation to the driver's license authorities. Your license will then be suspended until arrangements are made to pay the judgment.

6. In theory, if you do not make those arrangements or have the judgment discharged in bankruptcy, your license will remain suspended for the life of the judgment. That period of time varies by state.