The Need to Deter Uninsured Motorists

December 4, 2005

Andrea Neal column for Aug. 3 and thereafter
740 words

INDIANAPOLIS – My son’s ’94 Honda went into the shop this week for a $3,600 repair. He didn’t cause the accident that demolished the driver’s side door, yet it’s my insurance company that’s footing the bill.

We are the victims of an uninsured driver. And we’re far from unusual.

The insurance industry estimates one of every five Indiana drivers is uninsured. What’s worse, they are responsible for a third of all accidents.

If you’re like most responsible drivers, you may have assumed Indiana’s Financial Responsibility Law kept the uninsured off the road. The law requires drivers to maintain proof of their ability to cover costs associated with a traffic accident.

But, as headlines of recent days have made clear, a law is no good if it’s not enforced. Indiana’s hasn’t been.

From 2001 to 2003, the Indiana State Police lacked the manpower to process accident reports. As a result, the Indiana Bureau of Motor Vehicles couldn’t cross-check records to catch insurance dodgers. Thousands of uninsured motorists got off scot-free.

The situation came to light this summer after State Police finally processed a 300,000-accident backlog. Suddenly, Hoosiers were inundated with letters from the BMV demanding proof of insurance for accidents as old as three years. Failure to comply would result in 90-day license suspension and a $150 reinstatement fee.

This caused an understandable outcry from Hoosiers who didn’t see why they should suffer from bureaucratic incompetence. And suffer they did.

As reported July 19 in The Indianapolis Star, some motorists couldn’t prove they were insured because they’d switched insurance companies or their old companies had gone out of business. One man’s license was revoked, even though his agent sent in proof of insurance, and it took weeks to get it reinstated.

While the backlog created headaches, it exposed the source of Indiana’s problem. For too long, uninsured motorists have driven the streets with impunity.

In 2003, an investigative report by WISH-TV in Indianapolis determined few mechanisms were in place to get uninsured motorists off the road. That report concluded that a whopping 50 percent of all accidents in the central city of Indianapolis were caused by uninsured drivers.

No enforcement? No compliance.

Although police may ask for proof of insurance anytime you’re pulled over, they rarely do. Even at an accident scene, such as my son’s, it’s not possible immediately to detect law breakers. Although the woman who hit my son had no driver’s license with her, raising police suspicions at the time, her vehicle registration named American Family as her insurance carrier.

As it turned out, the phone number she gave police was disconnected and American Family had no record of a policyholder at her purported address.

How do you deter people like that? Create an environment in which offenders know they will get caught and you’ll cut the number of uninsured in half, experts say.

"We constantly have to look at how we can put more teeth" into the law, says Mary L. LePrez, BMV commissioner since March.

In 2003, the Indiana General Assembly gave judges the ability to suspend for a year the licenses of motorists whose offenses result in a court appearance. It’s not been effective, however, because they are only a fraction of the uninsured population.

Some states have passed laws requiring insurance companies to notify

the bureau of motor vehicles whenever a policy is cancelled, but at a cost of millions, DePrez points out. Others have pushed for a database to track insurance scofflaws.

The Indiana State Police last year acquired technology so it can scan accident reports into a computer immediately. If a crash occurs today, and a motorist fails to submit proof of insurance, the BMV will get a notice out within 30 days. The car owner has 45 more days to prove he had insurance before his license is suspended.

After three years of inexcusable neglect, enforcing these deadlines may have some deterrent effect on uninsured drivers. DePrez hopes that is the case.

But it will take more than that to reverse Indiana’s image as a haven for the uninsured. The next legislature should consider setting up a database that could be funded by higher license reinstatement fees.

Until then, there’s only one way to protect yourself: Pay extra, buy uninsured motorist coverage — just in case.

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