The reason for the mandate on car insurance is easy to justify. No one is forced to drive, but if all those who decide to drive carry valid insurance, the cost of insurance will be low. Should too many people drive without valid insurance, rates rise. Worse it becomes prudent to carry uninsured driver insurance. The cost of insurance for honest drivers is therefore significantly higher than it should be.
What should be done?
From a technology perspective, it's easy to link the databases used
by insurance companies and the local Department of Motor Vehicles.
Whenever anyone seeks to register a vehicle or to renew a driver's
license, it should be the work of seconds to confirm whether this person
has a valid policy of insurance in place. As a good example of the
benefits that come from this link, the experience in Michigan points the
way forward. Every year, the state DMV is required to register slightly
more than seven million passenger vehicles. Up to this point, drivers
have been able to present a paper certificate as evidence of a valid
policy of insurance. In a test run for the new computer system in July,
16% of the paper certificates presented were found to be fake. As a
trial, this has been a great success with more than four thousand
vehicles registrations suspended because there's no valid insurance
Fraud reduction should be the priority
The fake paper or card certificates are openly advertised online,
e.g. on Craiglist (obviously they come with disclaimers). Some of the
forgeries are quite sophisticated with the fraudsters running proper
telephone lines so that if anyone calls to query the validity of the
certificates, they can make reassuring noises. Others have a joke
quality as if they are never intended to be used in a real world
situation. There is, however, Harm being caused by every person who does
produce one, whether it is at a DMV office or at the scene of an
accident. It becomes increasingly difficult for honest drivers to find
cheap car insurance the more people avoid paying for insurance.
Michigan is now moving to confirm the link between all the databases.
With up to 20% of all vehicles on American roads being without
insurance, the use of computers to combat the fraud is essential. This
should apply not only to the DMV offices around each state. There's no
reason why the insurers' database should not be available to all police
officers while on patrol. If you tie in the license plate reading
systems with the database, the police officer would be able to pull up any uninsured vehicles on the road.
The more quickly these vehicles are removed, the greater the incentive
for drivers to buy the relevant insurance. Only then can everyone else
expect their car insurance quotes to start falling. When they aren't out
on mobile patrol is this not something that we pay our police officers