Crackdown coming on uninsured

It’s about to get tougher to drive without auto insurance in Rhode Island.
The R.I. Division of Motor Vehicles this fall is starting work on its first-ever system to identify drivers without accident-liability coverage and force them to get it or get off the road.
The crackdown is the result of a law passed by the General Assembly and signed by Gov. Lincoln D. Chafee this past summer requiring the DMV to have an uninsured-motorist prevention system by next July 1.
The legislation culminated a long debate about the best way to address Rhode Island’s uninsured driver rate of 18 percent, one of the highest in the country.
Like most states, car insurance is mandatory for Rhode Island drivers, but unlike many other states, the DMV has never had an active method for catching those who cheat.
Different states have adopted different methods for enforcing insurance mandates and an industry has risen up offering services to government agencies without the capacity to do the job themselves.
Last year, Rhode Island lawmakers debated a series of different insurance- verification plans, but could not reach a consensus with constituents and stakeholders on which one to choose.
The bill, sponsored by House Corporations Committee Chairman Brian Patrick Kennedy, D-Hopkinton, and in the Senate by Sen. Louis P. DiPalma, D-Middletown, calls for the creation of a database managed by a third-party vendor and updated by insurance companies, in which vehicle registrations are compared to the list of active policies.
Under the system, when the vendor identifies a vehicle with no insurance policy, it sends a notice to the owner requesting proof of insurance within 15 days, followed by a second 15-day notice if there is no response.
If the second notice is ignored, the vendor notifies the DMV, which then goes to traffic court to revoke the owner’s license.
To get their license back, drivers will need to pay a $250 fine, plus the existing traffic-court penalties for driving without insurance.
The reinstatement penalty increased from $150 in the original version of the bill.
Those reinstatement fees will finance the verification system with 15 percent of the charges, or $37.50 per violation, going to the private vendor. The DMV estimates that in the first year of operation, the system will bring in $4.1 million in reinstatement fees, with $600,000 of that going to the vendor. On top of that, the state projects currently uninsured drivers will be compelled to buy up to $18 million in new policies, generating $350,000 in new taxes.
Supporters of the bill say the benefit of the system isn’t the new revenue, but removing the cost of uninsured motorists on law-abiding drivers.
“A law that requires motorists to have a minimum amount of insurance serves little purpose if it cannot be enforced,” Kennedy said in a statement after the law was signed. “The ultimate end result should be fewer uninsured motorists and that should translate into policy savings for all the other motorists.”
Although they stand to benefit from additional auto-insurance policies being written, insurance companies had been unenthusiastic about the bill due to security concerns about posting information to a third-party website.
They supported an alternative bill, sponsored by Rep. Michael J. Marcello, D-Scituate, that would have created an electronic system for the DMV to make policy inquiries itself.
The DMV plans to issue a request for proposals by prospective vendors by the end of October, said DMV Administrator Anthony J. Silva in an email.
The development of the new system comes as the DMV is trying to complete a long delayed and costly conversion to a digital record-keeping system.
That conversion is now expected to be completed next May and agency spokeswoman Debbie Rich said there should not be any “integration issues” with the new insurance-verification system.
Frank O’Brien, Boston-based vice president of the Property Casualty Insurers of America, expects the new system will come with some bugs, but nothing that shouldn’t be overcome.
“We will work with the DMV on this issue,” O’Brien said. “Whenever you are doing something new, there are always going to be teething issues, but we are used to complying with requirements like this.” •