State to create program to identify uninsured motorists
STATE HOUSE – The Rhode Island Division of Motor Vehicles has been given the go-ahead to establish a program to identify uninsured motorists – estimated by the DMV to account for somewhere between 15 and 18 percent of the state’s licensed drivers.
Gov. Lincoln Chafee has signed into law legislation recently approved by the General Assembly to establish the program that will identify and then notify those uninsured motorists, allowing them up to 30 days to rectify the situation and, ultimately, revoking their registration and ability to operate their motor vehicle if they do not provide proof they have obtained at least minimum insurance coverage.
The new law is the result of legislation (2013-H5438A) and (2013-S0771Aaa) sponsored in the House by Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly) and in the Senate by Sen. Louis P. DiPalma (D-Dist. 12, Middletown, Little Compton, Newport, Tiverton). It allows the Division of Motor Vehicles to conduct an RFP (request for proposal) to hire a private contractor to establish and regularly update a database of uninsured motorists by comparing the state’s list of registered vehicles against information that would be supplied monthly by auto insurers.
Owners of vehicles that are determined to have been without auto insurance for at least three months would be notified by the company operating the database that they have 15 days to provide proof of insurance. Owners who fail to provide proof after a second notice and a second 15-day period would be identified to the DMV, which would revoke the auto registration.
A new registration and license would not be issued to the individual until a $250 reinstatement fee was paid as well as providing proof of insurance along with any other fines or penalties imposed for violating the Rhode Island law.
A fiscal analysis of the program indicated that the tracking system could raise about $4.1 million in new registration reinstatement fees in one year after the program gets underway, and an additional $350,000 in taxes on the extra $18 million in insurance premiums that previously uninsured motorists would be compelled to pay. (The private company that would operate the database and send out the warning notices would receive 15 percent of the reinstatement fees, leaving the state with a net of about $3.5 million of the estimated $4.1 million.)
The legislation, modeled after a program begun in Utah several years ago, was developed by Representative Kennedy and Senator DiPalma in cooperation with the insurance industry, the DMV and the state Department of Business Regulation.
In the case of the State of Utah, an uninsured motorist rate of about 18 percent dropped to 3 percent within a few years of instituting the program. Currently, there are 26 states that have uninsured motorist databases.
“A law that requires motorists to have a minimum amount of insurance serves little purpose if it cannot be enforced,” said Representative Kennedy when the legislation passed the General Assembly. “This legislation links the DMV and insurers together in an effort to reduce the number of uninsured vehicles that are believed to be on Rhode Island’s roads. The ultimate end result should be fewer uninsured motorists and that should translate into policy savings for all the other motorists on the road who are abiding by the mandatory auto insurance law.”
Senator DiPalma agreed. “It does not make a lot of sense to have a law that requires motorists to have insurance, only to have law-abiding drivers paying higher premiums because they have to have uninsured motorist coverage. There shouldn’t be any uninsured motorists. The sooner this database can get operational – and the DMV expects that can happened by next July – the sooner drivers should see a positive impact on their premiums. Anyone who has had an accident with an uninsured motorist knows the trouble and headache that causes. And with a DMV-estimated 150,000 uninsured vehicles on the roads, it has likely happened too many times.”
For more information, contact:
Randall T. Szyba, Publicist
State House Room 20
Providence, RI 02903