Rhode Island Gov. Considering Car Insurance Database Bill

Rhode Island Gov. Lincoln Chafee is considering a bill that would create a statewide database stocked with policy information that authorities would use to identify and penalize motorists who lack the proper insurance required to drive.

HB 5438 authorizes the creation of the Uninsured Motorist Identification Database (UMID) program. The legislation was proposed in February before passing the entire state Legislature earlier this month and was put on the governor’s desk this week.

According to the latest data from the Insurance Research Council (IRC), Rhode Island has the eighth-highest statewide rate of uninsured motorists in the U.S., at 17.6 percent, which is higher than the nationwide average of nearly 14 percent.

The UMID would identify nonexistent and lapsed coverage by referencing policy information that car insurers would submit monthly to the Department of Motor Vehicles (DMV). According to the bill, insurers would be required to report each of its policies, including policyholders’ names, dates of birth, driver’s license numbers and vehicle identification numbers.

The database would then attempt to match that information to the DMV’s vehicle registration information.

Unmatched vehicles showing a lack of coverage for at least three straight months would trigger a notification sent to those car owners, who have 15 days to provide proof of coverage or obtain coverage.

If no proof is offered within that time frame, a second notice would be sent to the vehicle owner followed by another 15-day period.

After that period, the DMV revokes the car registration of car owners who fail to provide proof.

There is a $250 fee for a car owner to reinstate their registration, according to the bill, along with fines and penalties that may be incurred because of the lack of insurance.

The state House passed the proposal on June 26, with Senate passage following on July 1. The legislation was passed to Gov. Chafee on Wednesday for final consideration.

If approved, the UMID is set to be operational by July 1, 2014, according to the bill.

Databases in Other States Similarly Verify Coverage

Verification databases already exist in several states around the U.S.

There are databases operating in Maryland and Texas, the latter of which is called Texas Sure and has been credited with reducing the number of uninsured motorists in the state since the program began in 2008.

But some of the efforts to establish and maintain those databases have encountered problems.

In Montana late last year, officials reported that some vehicles returned erroneous “unverified” statuses when referenced in the database.

Legislative efforts to establish the database in Mississippi has seen fits and starts. In 2011, then-Gov. Haley Barbour vetoed a proposal to establish a database over concerns about the system’s funding and management. Another effort in early 2012 stalled in the Legislature.

The current database in Mississippi was set to start this month, but the Associated Press reported that the program’s launch was delayed until next year because of disputes over vendors that would be contracted to service the program.

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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