Mississippi and Idaho Advance Insurance Verification Bills

The Idaho House and the Mississippi House Insurance Committee have both given the OK to legislation in their respective states to set up electronic databases that would track which vehicles have proper car insurance coverage and which are on the road without a policy.

More than 30 states have such systems. They work by aggregating state data on registered vehicles and matching that up with policy data fed into the system by insurers.

In theory, the fact that the databases exist should discourage motorists from driving uninsured because they know that police will be able to definitively determine whether or not the car is covered.

The systems are also set up to discourage drivers from purchasing cheap down payment auto insurance policies and then just dropping coverage once they’ve obtained documentation.

Insurers are required to update their data within a certain period after a policy cancellation so that police and motor vehicle departments can verify whether a resident really has coverage in place.

In Idaho, the penalty for driving without coverage is a $75 fine for a first offense and a fine of up to $1,000 for each subsequent offense withing a five-year period.

The current penalty in Mississippi for being caught without insurance is a $500 fine and suspension of driving privileges until the the offender can prove that he or she has coverage. But the verification bill would institute a tiered fine schedule.

Under the Mississippi bill, the fines for driving without coverage would be $300 for a first offense, $400 for a second offense and $500 for a third offense. State offices would have the option of either fining the offender, suspending registration and/or driving privileges, or all of the above.

The verification system could also be used to check whether a vehicle is insured when the owner goes to register it.

Second Try for Mississippi Database

This is the second time in as many years for Mississippi lawmakers to push for a state coverage database.

Last year, the House and Senate both approved a nearly identical bill to set up a system, but Gov. Haley Barbour vetoed it because of cost concerns and worries that it would place undue responsibility on the Department of Public Safety.

The new bill’s authors have addressed the second concern by sharing the responsibility of overseeing the system between the Department of Public Safety and the Department of Revenue.

Rep. Gary Chism, the author of both last session’s and this session’s bills, told The Associated Press that they have done more research this time around on the cost of the program in hopes that it will allay Gov. Barbour’s concerns.

In 2009, Mississippi had the highest estimated rate of uninsured motorists. The Insurance Research Council estimated that 28 percent of the state’s drivers lacked coverage that year.

The estimated rate for Idaho, on the other hand, was 8 percent.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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