Jones: Undocumented License Law in California May Have Led to UM Drop

November 17, 2016

California Insurance Commissioner Dave Jones announced today that Assembly Bill 60, a law which provided driver’s licenses to those who could not submit proof of legal presence in the U.S., may have led to a modest decrease in the number of uninsured motorists in the state.

A preliminary analysis by the California Department of Insurance shows that in 2015, the first year since the passage of AB 60, the number of insured vehicles rose by 200,000 more vehicles than would have been expected.

In the previous three years, the percentage of insured vehicles increased at the same rate as the number of registered vehicles, but the CDI analysis shows an unexpected increase in the number of insured vehicles in 2015.

“Many hoped to see an increase in insurance after California issued AB 60 driver licenses, and this preliminary data appears to show more insured vehicles than we would have expected in 2015,” Jones said in a statement. “This needs more study, but the preliminary data is encouraging.”

drivers_licenseUnder AB 60, the California Department of Motor Vehicles can issue an original driver’s license to an applicant who lacks proof of legal presence in the U.S. and meets all other requirements.

While it’s possible the increase in insured vehicles can be attributed to AB 60, it is important to note “there is an apples-to-oranges relationship between drivers licenses, registered vehicles, and insured vehicles,” according to the CDI.

The CDI noted that while it’s believed the increase is tied to AB 60, there are factors that could also cause the numbers now being seen. These include:

Every new AB 60 driver license would not be expected to yield a new insured vehicle because Californians do not need auto insurance to obtain a driver’s license; before AB 60 undocumented immigrants may have had a properly insured and registered vehicle but not had a California driver’s license; attempting to tie the number of insured vehicles directly to the number of driver’s licenses is not an accurate representation of the number of insured vehicles because there may be multiple drivers for one vehicle and the insurance follows the vehicle.

It is also possible that other factors like the improving economy and lower gas prices enabled more Californians to make installments payments and keep their auto insurance in force, the CDI acknowledged.

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