As a former Maryland resident who had cars registered there you should be aware that when you register or renew a vehicle's registration in MD you sign an insurance certification form. Your signature on this acknowledges that the minimum vehicle liability insurance will be maintained throughout the registration period.

This means Maryland counts it as a lapse of insurance if you still have registration on a car and you have not turned in your plates and registration. The state of Maryland would not know that you moved and were no longer in their state during the lapse period (since it does not appear that you turned in your plates or changed over your driver's license to SC during this time) but with their state laws it would not matter since your cars were still registered in Maryland meaning you were required to follow their financial responsibility laws.

If your husband wanted to cancel his Maryland auto insurance without being penalized for having a lapse according to state law he should have registered the cars in South Carolina and acquired car insurance there and then canceled his Maryland insurance and turned in the MD license plates.

Typically in Maryland when you cancel insurance on a registered vehicle the insurance company informs the MVA and they send you a notice of a lapse in insurance. Since you moved and it sounds as if you did not change your driver's licenses for sometime after moving to SC, it is likely that the MD MVA sent the lapse notice the address they had for you, the one on your MD driver's license.

You stated that you did not have insurance during the time that Maryland is fining you for so we do not see how you could not end up with the penalty they are placing on you. Even if you did have insurance from South Carolina at the time it would not have been accepted as proof of insurance by the state of Maryland. In MD the Maryland Insurance Certification (FR-19) is the only acceptable form of auto insurance verification, thus you need in-state insurance on file to not be found guilty of having a lapse of coverage.

To be the best of our knowledge the penalty that the MD MVA has in place for a lapse of auto insurance is penalty fees of $150 for the first 30 days and $7 for each day thereafter. There may be other penalties as well; the MVA could tell you what all penalties your husband is facing.

If you cannot afford this or need to set up a payment plan you should contact the Maryland state agency listed on your notice and see what can be done. They can tell you if they allow you to negotiate a lower settlement amount or a payment plan.

In most all states if you are going to take insurance off of your vehicle you will need to turn in your registration and license plates of your vehicles so that you are not found to have a lapse in car insurance and penalized by the state. Next time you need car insurance coverage for your vehicles come to us for free auto insurance quotes.