Many rental operations have a very small fleet, but yet seem to have issues with their vehicle registrations and proof of insurance. There are many reasons of why and how this can happen.
First let’s look at state reporting. Many states require that the insurance carrier report the addition and/or deletion of insurance on a given vehicle. Insurance reporting is usually done electronically with the state. However, there are still some states that utilize antiquated manual forms. Registration/proof of insurance issues almost always occur in a reporting state.
The insurance carrier is required to report the insurance using the name as it is listed on the policy. This can frequently be the issue with registration/proof of insurance, as the name the carrier has on the policy may not exactly match what is on the title/registration. Rental Insurance is a Commercial Auto policy, so if you have your title/registration in your personal name for financing purposes, this can cause the issue. The same is true if the address does not match. In some instances, the VINs do not match. An S on one form can be misconstrued as a 5 on another.
Some states only monitor the policies that have been cancelled or use the most recent information reported as valid, so if you have a new policy that has been reported, but your old insurance company was delayed in sending the cancellation to the state, the latest information is viewed as being valid and can cause a problem.
Many states do not allow commercial units to be registered online and require an in-person visit to the DMV. Other states require personal insurance to be reported, but not commercial policies.
One state that only requires personal insurance to be reported, uses a computer algorithm to determine whether or not the registrant is a commercial entity. So if your business name does not contain key words such as Inc., LLC, Company, etc., and the computer system cannot locate a personal insurance policy for that name, it kicks out a suspension automatically.
Lastly, good old human error, either on the part of the insured, carrier or state can be the simple explanation for the problem.
All of the above described issues can be cleared. Sometimes the fix is easy while other times it may be a bit more complicated. The first thing to do is READ what the state sent to you. Did you forget to check off a box or fill in a required section? If you need your insurance company to clear the issue for you, send them a full, clear, legible copy of what the state sent to you. This communication may have codes or other vital information to help clear the matter. Next, take action quickly. Most states do not give much time before a suspension takes effect. Your insurance carrier may need to interact with you or take multiple steps to assist you, so time is precious.
