Penalties for the uninsured
Penalties for the uninsured
Only three states have refused to make it mandatory for people to carry a minimum liability cover. The others have introduced financial responsibility laws which give every driver a minimum amount of money to meet their financial responsibilities should they be at fault in an accident. This rule does not change in those states that have introduced no-fault insurance programs. The intention is always to keep the uninsured driver off the road. Thus, all states have fines and, in some cases, the power to order uninsured vehicles confiscated.
This all sounds wonderful except the majority of states do not follow it up with effective enforcement. Computers are wonderful things. With the latest technology, they can store vast amounts of information. Better still, they can all be linked together so they share that information. It would therefore be possible for the government departments responsible for licensing and issuing vehicle tags to be linked to the insurance companies and the police. That way, everyone would know whether a vehicle was insured and the police could be proactive and visit with everyone who is the registered title holder. If there's no evidence of a policy, the vehicle could be removed. Alternatively, the police could monitor all vehicles on the road and on-board computers could give an immediate prompt if a vehicle was not insured. As it is, there's a good chance uninsured drivers will escape detection unless they are actually stopped for a moving violation.
To correct this imbalance, nine states have introduced no pay, no play laws. Four more states have bills on their way through the legislatures. The point of these laws is simple. In the majority of states operating an at-fault system, any driver who is injured by a negligent driver can go to court and recover damages for their medical expenses, pain and suffering, and loss of earnings. This applies no matter whether the victim is insured. Hence, uninsured drivers have a financial benefit. They have no paid their premiums, but are still entitled to the full menu of remedies available to the insured driver. So, these nine states have changed the rules of the game. Uninsured drivers can no longer make the same claims as the insured. Some headings of damages are either limited or excluded altogether.
The rules vary from state to state. So, as an example, let's look at California. As from 1996, uninsured drivers can no longer claim non-economic damages. Thus, they can claim for loss of earnings while off work due to their injuries, but none of the other headings of damages relating to their injuries is claimable. Proposition 213 formally relieves car insurance companies from the obligation to pay these amounts to uninsured drivers. This reduces the overall claims bill for the insurance industry, so it has helped keep the annual increases in car insurance rates lower. It may look hard to deny victims their usual remedies for damages to compensate them for their pain and suffering, but the Californians think that a fair penalty to impose on uninsured drivers. You can check out your own state's laws on your Insurance Commissioner's website.
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