Youngstown Daily Legal News

Proposal designed to target uninsured drivers

TIFFANY L. PARKS
Special to the Legal News
Published: April 28, 2014

A bill that would require the registrar of Motor Vehicles to establish an electronic motor vehicle insurance verification system gained movement in the Ohio House recently.

An official from Fedeli Group, a Cleveland-based firm specializing in employee benefits consulting, offered proponent testimony for House Bill 71 before the House Insurance committee.

In addition to an insurance verification system, the proposed legislation, sponsored by Rep. Kristina Roegner, would require an insurance company to notify the registrar upon the cancellation or lapse of a motor vehicle liability insurance policy and eliminate the financial responsibility random verification program within the Bureau of Motor Vehicles.

Roegner, R-Hudson, has said the bill was crafted to use current technology to more effectively and efficiently reduce the number of uninsured drivers on Ohio’s roads.

“In Ohio it is illegal to drive without insurance or other means of financial responsibility,” she said. “However, approximately 10 percent of Ohioans are still driving uninsured.”

Under current state law, a person must show proof of insurance when stopped for a moving violation or traffic accident, they are involved in a violation requiring a court appearance or they are contacted by mail through the Ohio BMV Random Verification program.

“The random verification program, as its name suggests, randomly targets 5,400 drivers per week. It requires those randomly selected to prove they have insurance within 21 days or face the suspension of their license,” Roegner said, noting that two problems exist with the current program.

“Many without insurance are never randomly selected and continue to drive uninsured (and) around 90 percent of those randomly checked do have insurance and the state has just inconvenienced them.”

With improvements in technology, Roegner said many other states are now using data provided by insurance companies to more effectively identify and target drivers who do not have car insurance.

“The legislation I am proposing would replace the random verification program with one that uses this data to identify those who likely are driving uninsured,” she said.

“Through the current random verification program, approximately 10 percent of those randomly selected are caught without insurance and appropriately penalized. Keep in mind, however, that less than 5 percent of drivers are randomly verified each year, leaving more than 95 percent of Ohio’s uninsured motorists continuing to drive without insurance on Ohio roads. There is a better way; a more effective solution.”

If signed into law, HB 71 would discontinue the random verification program and usher in a program to send “targeted letters” to individuals who state officials have reason to believe are driving without insurance.

“HB 71 requires the insurance companies to provide the data (name, address, vehicle identification number, year, make and model) of those drivers who cancel insurance, let their insurance lapse, and/or sign up for insurance to the Ohio Bureau of Motor Vehicles,” Roegner said.

“It is with this database that we can more effectively target those who are driving uninsured.”

Under the bill, the BMV would be required to contact any driver found to have canceled their insurance or allowed it to lapse and failed to obtain new insurance.

“If a driver fails to provide proof to the BMV or to obtain new insurance within a reasonable timeframe, (their) driver’s license would be suspended,” Roegner said.

“Furthermore, HB 71 seeks additional protection by requiring the BMV to cross-reference those who apply for vehicle registration or renewal with the list of insured drivers. Simply put, those who attempt to renew or register their vehicle without insurance would be denied.”

According to a fiscal analysis, the BMV could incur one-time costs ranging from $1 million to $3 million to implement the proposed insurance verification system.

The annual maintenance costs of the system would be approximately 10 to 15 percent of the implementation costs.

The analysis also stated the BMV would incur annual postage costs of $96,000 to $156,000 to send notices to people who are found to not have a valid motor vehicle liability policy.

The elimination of the random verification program would result in an annual savings of approximately $675,000.

In addition to Fedeli Group, HB 71 has been endorsed by PASCO, a Hudson-based parent company of firms providing technology solutions to banks, state government and automobile dealerships.

Validati, owned by PASCO, provides the services that support the state’s random verification program.

“In addition to fines and reinstatement fees, enforcing insurance compliance through a complete automated solution will have other positive economic effects within a state,” said PASCO President and CEO Peter Spitalieri.

“Studies show that uninsured motorists are involved in accidents more frequently than insured drivers and that these accidents tend to be more costly. If these drivers are hospitalized, many will be covered under Medicaid which has a direct cost burden to the state.”

Spitalieri said insured drivers are often left paying for expenses not covered by deductibles when they are in an accident with uninsured drivers.

“Accidents with uninsured drivers tend to be more litigated,” he said.

HB 71 has gained bipartisan support from 15 House members.

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