West Virginia Looks to Electronic Auto Insurance Verification System

March 16, 2010

West Virginia lawmakers want to give police and the courts an easy way to verify whether a driver has required liability insurance.

The House has approved a measure previously backed by the Senate to instruct the Division of Motor Vehicles to create an electronic insurance verification system that will allow law enforcement and the courts to verify evidence of insurance coverage with insurance companies. Insurers would be required to participate.

The bill now goes to Gov. Joe Manchin for his signature.

Sen. John Unger, D-Berkeley, sponsored the bill, which he said would help lower auto insurance costs that are driven up by the state’s large number of uninsured drivers.

State law now requires drivers to carry a proof of insurance card. However, backers of the new system contend that too many drivers obtain coverage just to pass vehicle registration, and then they cancel their policies.

The Insurance Research Council (IRC) has estimated that about eight percent of West Virginia drivers were uninsured in 2007, compared to the national average of 13.8 percent. States with the highest rate of uninsured drivers include New Mexico (29 percent), Mississippi (28 percent), Alabama (26 percent) and Florida (23 percent). Massachusetts (1 percent) and Maine (4 percent) have the lowest.

IRC also predicted that the number of uninsured drivers would rise in most states given the downturn in the economy.

Police would be able to use the new electronic system to immediately verify the existence of insurance during a traffic stop under the West Virginia legislation.

The final bill applies only to private passenger vehicles, not commercial. Commercial vehicle insurers could take part in the verification system voluntarily.

The electronic verification system is to follow a model established by the Insurance Industry Committee on Motor Vehicle Administration, an advisory group that functions as a liaison between the insurance industry and state motor vehicle departments.

The legislation requires insurers to cooperate in the electronic system but requires the state provide alternative methods of reporting for small insurers writing less than 500 non-commercial motor vehicle policies in the state.

The Division of Motor Vehicles must report to the Legislature within two years on the costs of the program and its effectiveness in reducing the number of uninsured motor vehicles.

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