State Licensing Debates Have Car Insurance Implications

State laws allowing non-citizens access to driving privileges and auto insurance coverage in Utah and New Mexico have come under heavy fire in the first months of the new legislative session, but it looks like they will be preserved after bills that would have changed their key parts have been heavily amended.

The bills in both states have received numerous makeovers since their initial introductions. But, essentially, their earlier versions would have altered the information required of applicants seeking driving privileges. Proponents of the bills said doing so world cut down on the number of undocumented immigrants obtaining the legal right to drive.

Both state’s laws require that applicants for licenses—or “driving-privilege cards” in Utah—must provide either their Social Security Numbers (SSN) or their Individual Taxpayer Identification Numbers (ITIN). There is a key difference between the two: SSNs are issued only to U.S. citizens, but ITINs are issued regardless of immigration status.

According to a report to the Utah state legislature in 2008, the vast majority of motorists in Utah who secure the right to drive by getting driving-privilege cards used an ITIN to do so. Out of the nearly 35,000 cards that were valid at the time of the study, only 606 were obtained by providing documentation other than an ITIN.

Utah’s driving-privilege cards come with certain restrictions but still allow the holder to drive legally and purchase car insurance with no license.

Utah Sen. Steve Urquhart, who wrote the original legislation in his state, says the practice of extending the privilege to be on the road to people without requiring them to first verify their citizenship makes it too easy for undocumented immigrants to live in the United States.

Proponents of the New Mexico legislation had the same take on the practice and hinted at possible security issues of giving non-citizens valid driver’s licenses.

Both bills would have removed the provision allowing for the substitution of an SSN with an ITIN, although Urquhart’s bill originally would have abolished driving-privilege cards altogether.

But since their introduction, both have dropped the removal of the ITIN option.

One argument espoused by opponents of restricting the ability of some state inhabitants to get legal driving privileges has been the potential effect on Utah and New Mexico’s uninsured rates.

New Mexico’s uninsured rate has already been estimated to be around 29 percent—the highest in the nation. Nullifying thousands of driver’s licenses in the state could simply mean that those people continue to drive, but do so illegally and without insurance.

Although Utah’s uninsured rate has been estimated to be much lower than New Mexico’s, requiring the use of SSNs or abolishing the privilege-card system could mean that the tens of thousands of cardholders would have no way to drive or purchase a policy legally.

The 2008 report to the legislature showed that holders of Utah driving-privilege cards purchased coverage at a rate that was only slightly lower than that of traditionally licensed drivers. It showed that about 76 percent of privilege-card holders had coverage, compared to 82 percent of standard license holders.

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.

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