HD74 - Uninsured Motorist in Virginia
Executive Summary: The Department of Motor Vehicles initiated legislation in 1986 to refocus our insurance monitoring efforts. Also, two insurance monitoring processes were recommended for elimination. These processes were extremely labor intensive and relatively ineffective. The elimination of the requirements for citizens to submit accident reports and for insurance companies to manually submit notification of cancelled insurance enabled DMV to channel its resources toward more effective insurance monitoring processes. The legislation was passed and new insurance monitoring processes were implemented in July1986. The focus of our insurance monitoring efforts now seeks to identify uninsured motorists prior to potential involvement in an accident or cancellation of liability insurance. During the 1987 session of the General Assembly, House Joint Resolution 230 was passed. The resolution requires DMV to report annually to the General Assembly on the uninsured motorist situation in Virginia and the Department's efforts to improve it. The uninsured motorist issue includes information on the effectiveness of Virginia's motor vehicle insurance laws, education to assist the public in understanding that payment of the uninsured motorist fee does not provide insurance coverage, and efforts to reduce the number of uninsured motorists on the road. The Insurance Monitoring Division administered four of the five insurance monitoring processes for DMV in FY92-93. Three of the processes attempt to identify uninsured motorists before they are involved in an accident. The fourth process allows a citizen to request verification of insurance information following an accident where it is believed that the other motorist involved was uninsured. The fifth process also attempts to identify uninsured motorists before they are involved in an accident. This process was not utilized due to the temporary incompatibility of the computer files during conversion to our new automated system. The new insurance monitoring processes implemented in 1986 had a number of benefits. First, citizens were no longer required to file an accident report with DMV. This decreased the public's burden of obtaining, completing and filing forms. Additionally, these processes decreased DMV's manpower requirements to process accident reports. The elimination of the requirement for insurance companies to manually report cancelled policies relieved a burden for insurance companies as well as DMV staff to cross-check cancellation of one policy and the possible issuance of another. Most policies were renewed with other carriers so that DMV and insurance companies were handling thousands of notices with very few positive results. The results of DMV's Insurance Monitoring efforts since July 1, 1986 are as follows: Vehicle Owners Issued Notices: 2,227,837 Resulting Net Orders of Suspension: 176,912 Average Detection Rate: 7.94% In addition to the insurance monitoring processes presented here, it is important to include the process, which supports insurance monitoring by ensuring that persons found to have violated the law comply with the penalties. Once drivers have been identified as having no insurance, they must comply with the order of suspension of their driving and vehicle registration privileges. Compliance includes payment of a penalty fee and maintenance of a certified insurance policy for three years. The requirement to maintain proof of insurance allows DMV to ensure that these individuals do, in fact, have liability insurance. During the three-year period, insurance companies cooperate with DMV by providing notification to the Department if an individual cancels their insurance. A portion of the revenues collected by DMV is appropriated for use in administering the Insurance Monitoring Program. The remaining revenues are available to be transferred to the SCC for distribution to liability insurance companies licensed in Virginia. Funds distributed by the SCC are used to help offset the cost of the uninsured motorist coverage required for all liability insurance policies written in Virginia. Since implementing the current Insurance Monitoring Program in July 1986, a total of $28,241,524 has been collected for transfer to the SCC. |
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