Alabama Set for Insurance Verification System

With legislation recently vetoed in Mississippi and signed into law in Alabama, insurance verification systems have been trumpeted as a way to both coerce drivers into buying liability insurance as well as solving the issue of the high numbers that continue to drive without insurance. But will these systems be a true panacea for the high numbers of uninsured drivers?

Laws exist across the nation with the same goal – to ensure every driver has minimum liability coverage. In Alabama, those caught driving without insurance can be fined $500.00 for a first offense. But even with these laws on the books, the Insurance Research Council (IRC) estimate that up to as many as one out of four drivers in Alabama don’t have coverage, the sixth highest rate of uninsured drivers in the United States. These drivers face the prospect of paying out of pocket in any crash that they cause as well.

In Mississippi, Governor Haley Barbour vetoed legislation that would have set up an electronic insurance verification system. While Barbour appeared to have agreed that the legislation would be a positive, he says he vetoed it in part because of the short length of time the state would have had to come up with their system – four months after passage. Mississippi is the second leading state for drivers without insurance, which the IRC estimates at 28%.

How Will A Law Enforcement Officer Use Insurance Systems in Alabama?

Insurance systems designed to verify coverage set up online databases that allow police and other government officials to access the coverage status of any driver in the state. In the past, drivers could simply buy a policy with a down payment, and then cancel it immediately after registering their car.

When a police officer pulled over such a driver in the past, the driver simply presented their insurance card as proof of insurance. If the date of the policy was valid, the officer had no way to know if the insurance policy was actually still in effect.

It’s not so with the new system. If a driver has cancelled their policy, that information will be available to an officer with a simple search on their computer. The Alabama electronic verification system is scheduled to go live in 2013.

Will Roads Be Safer when Authorities Can See Insurance Status?

One of the biggest problems when an uninsured driver gets into an accident is payment. In the old Alabama system, drivers could present verification of insurance that wasn’t active. Of course, the insurance companies wouldn’t pay on any claims. Victims may eventually have to sue the responsible uninsured driver. Unfortunately, many of these drivers had no significant liquid assets to sue for leading to issues actually collecting the money.

With the new insurance systems, a law enforcement officer can check actual insurance status more immediately and take action. If the issue is not fixed, the state can take more action.

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