GA bills aim to crack down on uninsured motorists

kennedy
kennedy

To register a car in Rhode Island, proof of an automobile-liability-insurance policy is mandatory, but the R.I. Division of Motor Vehicles admits it doesn’t regularly check to see if the policy you say you have actually exists.
As a result, some drivers cheat the system. An estimated 18 percent of Rhode Island motorists are driving without insurance, the ninth-highest percentage in the country and worst in New England, according to the Insurance Research Council, a property-and-casualty-insurance industry group. Those uninsured motorists, using area roads and getting into accidents without buying policies, effectively raise premiums for everyone else.
Even after major efforts to improve the Rhode Island DMV in recent years, the agency is constrained by antiquated systems and insufficient resources. To enforce the insurance laws on the books, the DMV relies on what has been described as a cubby system where paper inquiries are filed for insurance companies to periodically pick up.
So for the second straight year, state lawmakers are working on ways to strengthen the system and crack down on auto-insurance scofflaws.
Seven bills have been filed in the House this year addressing uninsured motorists, with two of them proposing the creation of comprehensive third-party-run databases for matching registrations and policies.
“The situation in Rhode Island is pretty bad,” said Frank O’Brien, the Boston-based vice president of the Property Casualty Insurers Association of America, which represents the nation’s large automobile-insurance companies, including Lincoln-based Amica Mutual Insurance Co.
“To their credit, Rhode Island DMV knows it is not efficient and it is working with us and the insurance industry to develop mechanisms to make this more efficient, cost-effective and enforceable,” O’Brien said.
But while there is a growing consensus that the state needs to address its insurance-verification system, there is disagreement about what the best solution is.
The two proposed insurance database bills would require the DMV to hire a third-party vendor to function as an intermediary between the state and insurance companies.
Of those two, a bill sponsored by Rep. Stephen R. Ucci, D-Johnston, is the most aggressive and controversial.
Known as the “InsureNet bill,” for the Georgia-based vendor that promotes it, Ucci’s bill would create a statewide vehicle-surveillance system of cameras mounted on lightpoles, police cruisers, bridges and other areas with good vantage points to scan roads. The cameras would photograph license plates and feed the images into the InsureNet system, where they would be cross-referenced with policy rolls insurers would have to update each day.
Police would review any plates spotted on the road without a policy in the database and issue citations, which would start at $350 for the first offense, $600 for the second offense and $750 for subsequent violations.
No state in the nation currently uses InsureNet and it’s easily the most costly of the alternatives. Company officials have offered to pay for some of the equipment costs with the fines paying for upkeep.
The bill is making its second appearance in the General Assembly after running into opposition last year based on its potential cost, complexity and perceived intrusiveness.
“There are significant privacy issues – the American Civil Liberties Union has testified against it, as did the state police and DMV,” O’Brien said about the InsureNet bill. “We opposed it. There is an expense associated and having someone get stopped and they are told they don’t have the required insurance because they just switched companies is something that would keep our customer-service people up at night.”
Attempts to reach Ucci and an InsureNet lobbyist were unsuccessful.
The other insurance-database proposal, known as the “Insure-Rite bill” for its Utah-based vendor, is sponsored by Rep. Brian Patrick Kennedy, D-Hopkinton, the chairman of the House Corporations Committee, which held a hearing on all the bills last month.
Insure-Rite would not set up any cameras or have police checking plates, but it would have a vendor set up an Internet database that insurers would be required to update and could be accessed by the DMV.
To force people driving without insurance to buy it, Insure-Rite, or whomever was awarded the state contract, would cross-reference the registration lists with policy roles.
For those that don’t match, the company would send out letters asking the owners to submit proof of insurance. If the owner sends back proof of an active policy, the issue is resolved. If not, they would get a follow-up letter notifying them of a license-revocation hearing.
To pay for the Insure-Rite system, the state and vendor would tap into $150 fees established in the bill for reactivating registrations canceled for no insurance. “What we like is it represents a compromise – it doesn’t have the Big Brother aspect and we are still going to follow through with the existing requirements for license hearings,” Kennedy said of his bill. “[The state] doesn’t have to get involved and [the vendor] does all the legwork until the final step of the process.”
Kennedy said DMV officials had expressed interest in his bill and, based on testimony at the hearing, he expected it would be the bill favorably voted out of the Corporations Committee this spring.
Rhode Island DMV officials could not be reached for comment.
The Insure-Rite system is currently in use in Utah and Texas, Kennedy said. Utah’s uninsured rate was 3.68 percent in 2010.
But even though insurers prefer Insure-Rite to surveillance cameras, the industry still has reservations about any database of personal customer information.
“We have a generalized security concern with the creation of a third-party database and have proposed a Web-services approach,” O’Brien said.
The insurance-industry-supported bill is sponsored by Rep. Michael J. Marcello, D-Scituate, and would establish an online system for the DMV to run inquiries with insurance companies to check registrations.
That system is currently in use in West Virginia, O’Brien said, which has a 10.8 percent uninsured rate.
Next door, Massachusetts doesn’t use any of the systems being discussed in Rhode Island but has the lowest uninsured percentage in New England at 4.5 percent.
To register a car in the Bay State, you need to get a stamp from an insurance company, instead of just a number. And the Massachusetts Registry of Motor Vehicles has a much greater internal capacity to check registrations, O’Brien said.
Even if they don’t like the idea of a third-party database, insurance companies should benefit from better enforcement of liability-coverage mandates in the form of more automobile policies written.
“Anytime there is an accident with an uninsured motorist it only adds to the costs of everyone else,” said Mark Male, executive vice president of the Independent Insurance Agents of Rhode Island, which is not supporting a specific bill this year. “From a public-policy standpoint, being able to enforce the laws on the books only makes sense. •

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