Maryland Insurance Verification Database Gets Upgrade

The Maryland Motor Vehicle Administration (MVA) is making its online coverage database more useful by enabling insurers to immediately notify state departments of changes in coverage status.

The MVA notified insurers last week that use of the new digital format will become mandatory in October.

Insurers previously sent policy information through media devices or by email, but the MVA will no longer be accepting those formats, according to a statement.

The system will allow insurers to submit daily information on their policies that have lapsed, been terminated, been added or have seen other sorts of changes.

Maryland’s lawmakers lent overwhelming support to HB 1180, the legislation behind the electronic system, with the state House passing the bill by a 136-1 vote and Senate by a 46-0 vote in March. Gov. Martin O’Malley signed off on the law in May.

Policies with lapsed coverage will be flagged by the electronic system and lead to suspension of vehicle registrations. Drivers with those policies are required to return “all evidences of that registration” or face license suspension.

According to 2009 data from the Insurance Research Council, Maryland has the 16th–highest rate of uninsured drivers in the U.S., with almost 15 percent of drivers lacking coverage.

On a first offense, penalties in the state for driving without proper Maryland auto insurance include a registration suspension and between $175 and $2,525 in fines and fees, according to state statutes. The total fine and fee amount is determined by how long the owner went without coverage. The MVA must get notice that the respective vehicle is covered by a policy and fees have been paid before restoring registration to that vehicle.

Electronic Efforts Help Other States Identify Uninsured Drivers

A handful of states across the U.S. recently kicked off use of their own databases tracking policy information.

Alabama’s verification system is undergoing pilot testing in 10 counties, with all of the state’s authorities planning to use the system by 2013 to confirm the coverage status of vehicles on the spot.

The Montana Highway Patrol began using the state’s database, which operates similarly to Alabama’s, in May.

In June, the Department of Motor Vehicles in West Virginia began collecting confirmations of VINs from registration renewals that it will use to verify information in the state’s Electronic Insurance Verification Program. Confirming a valid VIN in the database spares drivers from inadvertent errors or penalties generated when the database identifies vehicles lacking proper coverage or information.

The database in Texas, named TexasSure, has been in use since 2008 and is credited with reducing the rate of the state’s uninsured drivers from 24.28 percent to 21.65 percent in its first two years of operation.

Bills in Tennessee and Mississippi to establish similar databases were discussed in the last legislative session in those states, but both efforts stalled in the legislative process.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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