Hawaii Officials Recommend Web-based Insurance Verification

A working group in Hawaii is recommending that the state establish a web-based verification system within two years that allowing authorities to instantly confirm that a driver has a valid policy.

The recommendations, published by the state’s regulatory department late last week, establishes the framework of an insurance verification program, including issuing notifications that target uninsured motorists who repeatedly break the law and suspension of their vehicle registrations if they fail to reply.

The program should be implemented in January 2015, according to the group, which also recommended that lawmakers consider legislation allowing motorists to provide electronic proof of insurance coverage to authorities when asked.

The group looked at two general types of programs that allow authorities to instantly confirm a car has the proper coverage: one that utilizes “book of business” information regularly submitted from insurers to a database and the other employing web-based verification through coverage data like policy numbers.

Hawaii had an 11.2 percent rate of uninsured drivers in 2009, according to the most recent data available from the Insurance Research Council, putting it lower that the nationwide average of 13.8 percent that year.

Group Wants to Lessen Power of Judges Over Uninsured Drivers’ Penalties

Hawaii’s uninsured penalties for first-time offenders includes a maximum $500 fine and three-month license suspension.

Repeat offenders face at least a $1,500 fine, though they can ask for community service in lieu of the fine.

The working group found that Hawaii had court provisions of “particular interest” governing penalties charged against uninsured drivers. Under those provisions, a judge has the discretion to suspend the entire fine or part of it if the motorist can provide proof of coverage to the court or, if that motorist asks for it, substitute community service in place of a fine.

Dennis Kamimura, administrator of the Motor Vehicle and Licensing Division, stated in the report that penalties for driving without coverage should be “mandatory, rather than discretionary.” Michael Onofrietti of the Hawaii Insurers Council (HIC) recommended that authorities seize the vehicles of drivers when they violate the coverage requirement three or four times.

Ultimately, the working group recommended to state lawmakers that judges lose their “discretionary authority” over the fine suspensions, though it said courts should preserve the judges’ powers to penalize an uninsured motorist with community service instead of a fine.

The working group also made final recommendations that fines be made mandatory to fund a “special fund” that would support administration of the verification program.

During discussions, Kamimura proposed charging an additional $1 fee to motor vehicle registrations, with the group’s final recommendations suggesting a “small fee” added to vehicle registrations.

Utah charges a similar $1 fee that funds its system, which third-party vendors involved in the working group discussions said would “more than pay for an insurance verification system,” according to the report.

Authorities Review Fines, Fees, Citations with Working Group

Members of the working group included officials from the state’s court system, insurance department, law enforcement agencies and insurance industry representatives from State Farm and the Property Casualty Insurers Association of America (PCI).

State court officials who were part of the working group shared 2006-12 data about citations that included $110 in average fine/fee per collected per cited violation and $279 in average fine/fee collected per conviction in that time period.

According to the Honolulu Police Department, the number of citations issued by officers to uninsured motorists fell from nearly 30,800 in 2003 to about 14,180 in 2011. The department told the working group that the drop may be attributed to “the increased ability to produce realistic forgeries of motor vehicle insurance cards.”

Industry members told the working group that there is “no significant difference” in the rates of uninsured motorists in the approximately 33 states with verification programs and those lacking one.

PCI’s Mark Sektnan said that a web-based approach would be best, though he added that states should pursue other “simpler and less costly” methods of combating uninsured driving, according to the report.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

No comments yet.

Comment on this article