Many drivers still not insured

MONTGOMERY -- A 1999 law requiring that Alabama motorists carry auto insurance has put little or no dent in the number of uninsured drivers on state roads, the results of a national study suggest.

The Insurance Research Council, a nonprofit study group funded by insurance providers, released the study showing 25 percent of Alabama drivers lacked insurance between 1999 and 2004. That was unchanged from a 1998 state study of uninsured drivers, and tied California for the second-highest percentage of uninsured drivers in the 50 states. Mississippi ranked first.

Insurance experts say the problem with the law is that people with relatively few assets to protect have no reason to buy insurance.

"I think mandatory liability insurance is a tax on the poor," said Carol Jordan, a professor of risk management and insurance at Troy University. "They don't really need it. They don't have assets to protect."

Supporters say the law -- originally pitched as a way of reducing the number of uninsured drivers -- can still work but needs more teeth.

"I'm convinced it will work," said House Minority Leader Mike Hubbard, R-Auburn. "It's just a law enforcement issue at this point."

Statistics from state agencies and local police departments seem to back up last year's Insurance Research Council survey.

Each year, the state Department of Revenue mails out surveys to a randomly selected sample of 5 percent of drivers in the state asking if they have insurance. If the driver replies no or fails to respond to the survey, the department suspends the vehicle's registration.

The department mailed 142,303 questionnaires between Oct. 1 and June 30, and issued 74,031 registration suspensions to those who replied no or did not reply.

Revenue Department spokeswoman Carla Snellgrove, however, stressed that those who were issued a suspension could have had insurance but simply did not respond to the survey.

The department does not break out the negative replies from the unreturned surveys, Snellgrove said. Drivers must pay $100 to restore their registration, and $200 for a second offense.

Drivers convicted

More than 49,000 drivers statewide were convicted of driving without insurance, failing or refusing to show insurance or operating a vehicle with invalid registration between Oct. 1 and June 30, according to statistics from the Department of Public Safety and the Administrative Office of Courts. The numbers were compiled by the Department of Revenue. While driving without valid registration does not necessarily mean that a person is driving without insurance, the department does suspend registrations of vehicles not covered by policies.

Drivers who violate the mandatory insurance law must pay a $500 fine for a first offense, and up to $1,000 for a second offense.

Local police across the state also write citations for insurance violations.

Bob Hunter, director of insurance for the Consumer Federation of America in Washington, D.C., said that poorer states like Alabama and Mississippi will have a greater percentage of uninsured drivers in part because those on the lower end of the income scale have less to protect, and more immediate financial needs.

"There's a tendency for people with assets to have insurance," he said. "For people without assets, it's a piece of paper that doesn't give them much."

The state set minimum insurance limits in 1984 and passed the first mandatory liability insurance law in 1999.

Alabama's insurance minimums -- $20,000 for single injury or death; $40,000 for multiple injuries or death; and $10,000 for property damage -- have not changed since 1984. A bill that would have increased insurance limits passed the Legislature late on the final day of the session last month but was pocket vetoed by Gov. Bob Riley.

Jeff Emerson, a spokesman for the governor, said Riley favors increasing the minimums but that the bill as passed contained language that would have required the limits to go into effect immediately, which could have left thousands of drivers in violation of the law without their knowledge.

State Rep. Jeff McLaughlin, D-Guntersville, introduced legislation in this year's legislative session that would have created a database for police officers to access during traffic stops to check the veracity of a person's insurance. The bill died in committee.

Rates relatively low

Auto rates are relatively low in Alabama. The average driver in the state spent $677.36 a year on car insurance in 2004, according to the Insurance Information Institute, a nonprofit information group for the insurance industry. That put Alabama 39th in the nation, and below the national average of $837.86.

Hubbard said the 1999 law as written lacks bite. The legislation initially required drivers to show proof of insurance when registering vehicles, but a revision the following year struck that requirement down; critics said it would have created logistical nightmares in government offices and allowed people to cancel their policies once they got their tags.

Enforcement now consists of the Department of Revenue's surveys and checks by police officers during traffic stops or at routine safety points.

Hubbard said he wanted stricter enforcement in the original versions of the bill, but "had a hard enough time" getting the legislation passed in its current form.

"The point that I make is driving a car is not a right you have, it's a privilege," he said.

Drivers who want to evade the requirements can buy insurance and get a card saying it will last for six months, then cancel it after one month, said Ragan Ingram, a commissioner with the state Department of Insurance.

"We don't have any enforcement provisions," he said. "The way we're doing it right now, where revenue sends out audit letters, there are better ways to skin the cat."

State Rep. Alvin Holmes, D-Montgomery, who opposed Hubbard's bill, said he is not against mandatory liability insurance but would prefer to change state law to allow companies to offer policies with less coverage.

The need to drive

In a state like Alabama, with a large rural population and little in the way of public transportation, Holmes said driving a car is a necessity.

"Driving is the livelihood of a lot of people," he said. "They've got to get to work, take their children to the doctor, (and) take old folks to the doctor."

Mobile Police Department citations for driving without insurance and without proof of insurance nearly doubled between March and April of 2006 -- going from 595 to 1,182. The number has fluctuated wildly since then, but never fallen back to the March 2006 level.

Mobile Police Department spokesman Eric Gallichant attributed the increase to additional checkpoints. The Baldwin County Sheriff's Office does not keep track of citations issued for driving without insurance. The Gulf Shores Police Department issued 16 citations for driving without insurance last month, about 12 percent of the total number of citations and second only to speeding tickets.

During legislative debates over illegal immigration bills last spring, some House members would invoke stories of undocumented workers getting into accidents with drivers, and leaving the affected drivers unable to collect insurance.

The extent of this problem is uncertain -- the Department of Public Safety does not track illegal immigrants charged with not carrying insurance, and several local police departments contacted by the Press-Register do not keep track of citations for driving without insurance.

Most insurance experts, however, agree poverty is the major factor in keeping the numbers of uninsured drivers up.

"You have incentive to buy liability insurance," Jordan said. "If you don't have assets, you don't have assets to buy insurance. If you can't afford a second payment, you let it lapse."