Calif. Speier Bill Would Close Loopholes in Proof of Auto Insurance Law

March 10, 2004

Senator Jackie Speier (D-San Francisco/San Mateo) has introduced SB 1500, a bill to close loopholes in the state’s proof of auto insurance law.

“People can buy auto insurance, get their vehicle registration renewed, and then cancel the insurance the next day,” said Speier. “They can buy a new car or transfer registration–and proof of insurance isn’t required. I’ve always wanted these loopholes closed, and it’s time to try again. Since my original legislation passed, the Dept. of Motor Vehicles estimates that the percentage of accidents involving uninsured vehicles has declined from 24 percent in 1996 to 14 percent last year. That’s a nearly 40 percent reduction because we’re enforcing the law. But we need to close the remaining loopholes. People who buy auto insurance and play by the rules shouldn’t be victims of uninsured accidents, nor should taxpayers.”

SB 1500 would:

*Require proof of auto insurance at the time that a vehicle registration is originally issued or transferred (current law only requires proof at the time of registration renewal);

*Require all insurance companies to electronically report auto insurance policies to the DMV, and to report when insurance lapses and is not replaced. Currently, about 66 percent of all vehicles covered by the proof of insurance law have an insurance policy voluntarily reported by insurers to the DMV, but DMV doesn’t have the legal authority to require this of insurers;

*Require the DMV to suspend, cancel or revoke a vehicle’s registration if lapsed insurance isn’t replaced by in-force coverage within 45 days of the date DMV notifies the vehicle owner. Current law grants DMV the authority to suspend, revoke or cancel registrations due to lack of insurance, but DMV doesn’t use this authority; and

*Abolish the sunset on the proof of auto insurance law in two counties: Los Angeles and San Francisco. The law is permanent in all other counties in California, but sunsets on Jan. 1, 2007 in LA and San Francisco in conjunction with a pilot project on low-priced automobile insurance in those two counties.

Topics California Auto

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