Auto insurance - got it?

Gus Philpott
Woodstock Advocate
November 27, 2009

Do you carry liability coverage on auto insurance? Most likely, you do. Sure, it costs you a premium every year, but it’s worth it, if you are ever involved in an accident.

If you get caught in Illinois without auto insurance, your smallest worry might be the $500 ticket (plus maybe $250 in court costs) that it will cost you. And I think the fine for the second offense might be $1,000. You can probably buy a lot of auto insurance for that.

Your bigger worry ought to be the legal expense of defending yourself against a claim, should you be in an at-fault accident. It won’t take long to run up a large bill for legal expenses. Most good attorneys will charge you $300-400/hour. And you probably won’t want just a “good” attorney; you’ll want a “very good” attorney (translate to higher cost per hour).

After you spend a sizable chunk of money on legal fees to defend yourself in an at-fault accident, then you’ll have to cough up the money for property damage, medical care, pain and suffering. That’ll cost you tens of thousands of dollars. No money? There go your house and car.

A short Associated Press article in today’s Northwest Herald indicates that “thousands” of drivers don’t carry auto insurance. That, I suspect, severely understates the problem. How about thousands of drivers in each state don’t carry auto insurance.

When I lived in New Mexico, one insurance agent estimated that 40% of the drivers did not carry auto insurance. One reason is that you could stand right under the sign at the DMV that said you must have and prove you had insurance to get your license plates. Except that twice I stood right under the sign and got my plates without having to show the insurance proof (that I had in my pocket).

I laughed at the cop-outs by two people quoted in the short article.

Scott Harrington, a professor of health care management and risk management at the University of Pennsylvania, was quoted as saying, “The auto insurance mandate is almost everywhere. But it’s not rigorously enforceable.”

Professor Harrington either used the wrong word or he was misquoted. The correct word would be “unenforced.” The law is absolutely enforceable, and easily so. A tie-in between insurance company computers and a state’s motor vehicle records could inform the DMV whenever an Insured allowed his auto insurance policy to lapse. Notice could be electronically transferred ten days after a policy lapsed.

Some drivers purchase auto insurance, arrange to pay for it monthly, receive the Auto ID card and then drop the insurance. Then they can drive around with “evidence” of a policy, even though the policy is not in force. A cop looks at the insurance ID card, believes he is looking at proof of insurance and hands it back to the driver. Does the cop ever ask, “Is your auto insurance in force today?”

Computers could inform the DMV of a policy lapse. State laws could authorize DMV computers to notify State Police and local police that insurance had lapsed. Police could be authorized to remove license plates from uninsured vehicles. Think a driver would pay the premium pretty fast to get his plates back and be able to drive his car?

David Sampson, president and CEO of the Property Casualty Insurers Association of American, was quoted as saying that drivers’ personal financial situations, not state rules, were a better indicator of whether they carry insurance.

Again, not so. Drivers willfully disregard state laws about auto insurance because they are not rigorously enforced. Drivers might say they cannot afford auto insurance. If they cannot, then they should not be driving a car.

If all drivers carried insurance, would auto insurance rates go down? Many think so.

What can you do? Contact your State legislator and insist that mandated auto insurance laws be enforced. Ask your legislator to contact Director Jonathan Moncken of the Illinois State Police and direct him to enforce auto insurance laws.

Contact your local police department and your sheriff’s department and ask that officers and deputies inquire about the validity of the insurance ID card presented on every traffic stop. Should it later turn out that the insurance was not in effect, officers can deal with drivers who lied to them.

What percent of vehicles with Illinois license plates are uninsured?