Alliance: Ill. Pols Should Drop Auto Insurance Database Idea

The Alliance of American Insurers has urged Illinois legislators to permanently shelve plans to create a database to track the validity of personal automobile insurance coverage. The proposed database would be administered through the Secretary of State’s office and would attempt to identify uninsured drivers by comparing vehicle records with insurance records.

“For a multitude of reasons, such programs simply don’t work,” said Bill Schroeder, vice president and Midwest region manager for the Alliance. “Insurance reporting programs have never been proven to be effective in reducing the percentage of uninsured drivers on the road. There are simply too many possibilities for errors, and when state and insurance records don’t match up, legally insured drivers all too often end up being incorrectly fined, or worse. The costs of such a program may be exorbitant for both insurers and the state and consumers are ultimately going to be on the receiving end of those costs.”

Speaking before the Illinois General Assembly Subcommittee on Mandatory Insurance, Alliance Policy Manager Lynn Knauf said that Illinois already has some of the most effective laws and procedures in place to enforce the state’s mandatory auto insurance law. The state requires known offenders of the law to file proof of insurance with the Secretary of State’s office, and, if caught driving without such proof on file, the driver faces certain jail time. Stiff fines are assessed for driving without insurance, and the state randomly verifies insurance on thousands of drivers each year.

“Unfortunately, some drivers will never comply with the law,” said Knauf. “Some may be scofflaws, while others may mistakenly think they have coverage or simply cannot afford insurance coverage. Enacting another law to enforce a law already on the books isn’t going to change that.”

The Alliance, headquartered in Downers Grove, Ill., represents more than 340 property/casualty insurers.