Up to 15 Percent of Montana Vehicles Don’t Have Basic Insurance

March 8, 2006

As many as 15 percent of Montana vehicles lack required liability insurance, and current penalties against the owners don’t act as much of a deterrent, legislative auditors reported.

The state Motor Vehicle Division said it is investigating the feasibility of a new real-time verification system that would let police simply check insurance by running license plates through a computer, similar to the way they check for current registration.

The auditors told the interim Legislative Audit Committee that the current system of checking insurance is not effective.

Police ask for a driver’s proof of insurance only if stopped for another infraction, and some drivers simply doctor up fake insurance cards that officers currently have no way of verifying, auditors said. And there is only a 5 percent chance that an uninsured motorist will get caught for not having insurance, auditors reported.

Legislative auditors, in a 26-page investigation, said they estimate somewhere between 9 percent and 15 percent of Montana’s registered vehicles are not insured by their drivers.

The penalty for those who are caught driving without insurance, which ranges from $250 to $500, often costs less than getting insurance — giving the uninsured little incentive to comply with the law.

Although penalties have been increased in recent years, the number of uninsured drivers seems to be increasing, said Dean Roberts, administrator at the Motor Vehicle Division of the Department of Justice.

The number of people found guilty in the courts of driving without proof of insurance increased from 11,206 in 1996 to 15,365 in 2004.

“It doesn’t seem like anything is making a huge dent in this problem,” Roberts said.

The insurance industry estimates roughly 14 percent of drivers nationwide don’t have insurance.

Roberts said the Department of Justice is looking at the cost and accuracy of new, instant insurance verification systems being tested in other states.

Under the system, officers could run a license plate number through a computer that would check against insurance company databases to see if the vehicle was covered by some type of insurance. The insurance industry would maintain its own databases.

The system could be paid for by a vehicle registration surcharge of 50 cents to $1, Roberts said.

He said the reasons for drivers going without insurance vary, including those who simply can’t afford it and those who would rather not spend money on insurance. The agency wants to catch those who can afford insurance but choose not to buy it.

The Department of Justice may ask for a new law during the 2007 legislation if it thinks the instant verification system could work, Roberts said.

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