A bill in Arizona that would have changed the current mandatory auto insurance laws to empower law enforcement to tow and impound vehicles if they are driving without liability insurance was defeated in the House Appropriations Committee.
Senate Bill 1165, which was taken up on Thursday and narrowly defeated, was authored by state Rep. John Kavanagh, R-Fountain Hills.
The Independent Insurance Agents and Brokers of Arizona Inc. had raised concerns that the bill if passed could lead to the towing and impounding of a small number of vehicles of drivers who are actually insured and that it could create a liability issue for insurance agents.
IIABA stated their concern was individuals who would have their vehicles towed are those who show up in the state’s database as not having insurance because their vehicle identification number had been improperly inputted into the system. It’s estimated more than 200,000 vehicles in Arizona have incorrectly reported VIN’s.
The group argued that could also impose a liability on agents who may have given the wrong number to Arizona’s motor vehicle department.
Under the current method, a citation is issued to drivers without proof of liability insurance. Under the proposed legislation the vehicle would have automatically been towed and impounded and the charges for towing and storage would have to be paid even if the vehicle owner subsequently proved the vehicle was properly insured.