It is easy to justify the reason for the mandate on car insurance.
Although driving isn't forced upon anyone the cost of insurance would be
low if all those who decided to drive carried valid driving insurance.
Should too many people drive without valid insurance, rates rise. Worse
it becomes prudent to carry uninsured driver insurance. The cost of
insurance for honest drivers is therefore significantly higher than it
should be.
What should be done?
It is simple to link databases that are used by the local Department
of Motor Vehicles and insurance companies, from a technology
perspective. Whenever anyone seeks to register a vehicle or to renew a
driver's license, it should be the work of seconds to confirm whether
this person has a valid policy of insurance in place. As a good example
of the benefits that come from this link, the experience in Michigan
points the way forward. Every year, the state DMV is required to
register slightly more than seven million passenger vehicles. Up to this
point, drivers have been able to present a paper certificate as
evidence of a valid policy of insurance. In a test run for the new
computer system in July, 16% of the paper certificates presented were
found to be fake. As a trial, this has been a great success with more
than four thousand vehicles registrations suspended because there's no valid insurance cover.
Redusing this kind of fraud should be the priority
The fake certificates of are openly advertised online, e.g. on
Craiglist (obviously they come with disclaimers). Some of the forgeries
are quite sophisticated with the fraudsters running proper telephone
lines so that if anyone calls to query the validity of the certificates,
they can make reassuring noises. Others have a joke quality as if they
are never intended to be used in a real world situation. But every
person who does produce one, whether it's at a DMV office or the scene
of an accident, is causing harm. The more people avoid paying, the more
difficult it is for all the honest drivers to find cheap car insurance.
Michigan is now moving to confirm the link between all the databases.
With up to 20% of all vehicles on American roads being without
insurance, the use of computers to combat the fraud is essential. This
should apply not only to the DMV offices around each state. There's no
reason why the insurers' database should not be available to all police
officers while on patrol. If you tie in the license plate reading
systems with the database, the police officer would be able to pull up
any uninsured vehicles on the road. The more quickly these vehicles are
removed, the greater the incentive for drivers to buy the relevant
insurance. Only then can everyone else expect their car insurance quotes
to start falling. Is that not what we pay out police officers to?
