A number of Midwest states are showing a renewed interest in reducing the number of uninsured motorists on their roads. According to a recent survey from the Insurance Research Council, 12.6% of motorists are uninsured. Although the estimated percentage of uninsured motorists has trended downward over the past 20 years, this is still a significant figure.
Size of problem varies by state
The size of the problem varies across the country. In Oklahoma, approximately one in four motorists are uninsured, while in South Dakota, it is one in 12. However, in the Midwest, Michigan holds the largest percentage of uninsured motorists and ranked fifth in the country with more than one in five uninsured motorists. Other Midwestern states that have had higher percentages of uninsured motorists include Illinois, Indiana, Missouri and Ohio.
What are the parochial concerns? In Michigan, a state with above-average insurance premiums, there is widespread and well-known insurance identification card fraud. In an effort to combat that fraud, the Michigan Department of State decided to verify coverage of every single motorist seeking to renew their vehicle registration one day in July 2013. The results were eye-opening, to say the least. The overall fail rate for the state came in at 16.1%; however, certain counties, such as Wayne, exceeded 25%.
Task forces, reports and new laws
The results led to the state forming a task force to study the issue, and in turn recommending greater enforcement measures, such as allowing law enforcement access to the Department of State's insurance coverage database.
Illinois, Minnesota and Ohio also formed task forces to consider the issue. Illinois' task force is still active, but Minnesota and Ohio both released reports.
The Minnesota Department of Public Safety, which spent more than six months studying the issue, recommended strengthening proof of insurance requirements and processes at vehicle registration; increasing penalties for people convicted of driving without insurance or without proof of insurance; and implementing a public awareness program to promote compliance with the compulsory insurance law.
In Ohio, the legislature created the Financial Responsibility Study Committee to study uninsured motorists. After an extensive review, the committee recommended eliminating the state's Random Selection Program and replacing it with an electronic verification program to provide access to more timely and accurate coverage information. States with successful electronic insurance verification programs report reductions in their uninsured rates ranging from 6% to 20%.
In Tennessee, where approximately 20% of drivers are uninsured, Gov. Bill Haslam recently signed a law that establishes an online electronic insurance verification program. This bill requires the commissioner of revenue to contract with a third-party vendor to develop and implement an online electronic motor vehicle insurance verification program. Iowa is also considering similar legislation.
"No Pay, No Play" laws
Another way in which states are tackling the uninsured rate is by enacting "No Pay, No Play" laws, most recently in Indiana. This type of legislation prevents uninsured motorists involved in crashes from suing for noneconomic damages, such as pain and suffering. About 12 other states, including Michigan, have enacted this law, but recently the Oklahoma Supreme Court struck down that state's version. This type of law is considered one way of discouraging motorists from driving without insurance. Best of all, they are self-enforcing. That is, it does not cost the state any money to enforce them. And in today's economic climate, no cost is very attractive to a lot of states.
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