Driving Without Insurance: We Need Harsh Penalties

[Voyager]

@casdave

I’m completely amazed by this idea of having limited insurance liability to third parties.

In the UK, no matter what the value of the vehicle happens to be, the insurance of the party at fault must pay out, and that can also include unlimited medical expenses, some claims here have paid out in excess of $3 millions.

What is the point of having insurance that actually does not cover the cost of compensating th einjured party ?

I used to live in New Jersey when we had the highest rates in the nation. The reason for no-fault is to cut down on lawsuits. Sure it is a good idea for the party in the wrong to pay, but usually there is a dispute. The court costs and legal fees start to outweigh the damage in all but the most serious cases. Having no fault (which was bitterly opposed by lawyers) means less legal fees, smaller premiums, and a higher percentage of premiums going to the injured parties.

I was in an accident with an uninsured (and unlicensed) driver. His license had been suspended. It was kind of fun listening to the cop yell at him. My uninsured motorists coverage paid it, and my rates did not go up.

Surely there is some data mining that could be done to correlate cancellation of coverage with registrations. You need insurance to register a car, and I assume it gets cancelled. You’d have to be sure the person cancelling the insurance didn’t pick it up someplace else. Wouldn’t a central clearing house, like a credit check, run by the industry in cooperation with state governments help this a lot?

The purpose of fines would be to make the cost of driving uninsured greater than driving insured - but it doesn’t work if people think the probability of getting caught is low.

[Finagle]

@Agent Foxtrot

Who would have to pay besides me if I got in an accident uninsured? The other party’s uninsured motorist coverage would pay for his damage, then his insurance company would sic its lawyers on me to receive reimbursement.

SaintCad, I think you’re looking for something that’s not there.

Ada,

And what if you nail a bicyclist or pedestrian? Their life is possibly ruined with no chance of compensation from you – no medical payments, no payments for time off work or for paying for rehabilitation. And, of course, having no insurance, you’re much more likely to do a hit and run, rather than face the music. (In such a case, I’d be in favor of auctioning off organs of the driver until all bills had been paid.)

Further, if you get badly injured in a car wreck with no insurance, I imagine that the county is going to get stuck paying the bills in many ways – cleaning up the wreck site, paying your medical bills, and so on. None of which they’ll be able to sue you for because you’re poor, so it’ll raise the taxes of everyone in the county by some small amount.

[light_strand]

I have to admit that I don’t really understand auto insurance. What I don’t get, is why we each don’t carry coverage for our circumstances alone. What difference is it who is at fault, especially when states like MI have no-fault anyway?

If it was my world and I hit an uninsured driver, my insurance replaces my car, and my health, and the other guy is SOL. He should have had insurance. On the other hand, if an uninsured driver hits me my insurance replaces my car, and my health, and the other guy is SOL. He should have had insurance. See how easy?

[Saint_Cad]

@light strand

I have to admit that I don’t really understand auto insurance. What I don’t get, is why we each don’t carry coverage for our circumstances alone. What difference is it who is at fault, especially when states like MI have no-fault anyway?

If it was my world and I hit an uninsured driver, my insurance replaces my car, and my health, and the other guy is SOL. He should have had insurance. On the other hand, if an uninsured driver hits me my insurance replaces my car, and my health, and the other guy is SOL. He should have had insurance. See how easy?

My understanding (which could be wrong) is that no-fault insurance drives up the rates for good drivers. The grandma who only uses her car to drive 3 blocks to the store twice a week and has never had an accident has to subsidise the maniac 20-something in his hot-rod whos had five accidents in the last month.

My experience is that the insurance company can also declare an accident a no-fault situation. In a parking lot, a sports car had stopped (parked) diagonally right in my blind spot a foot behind me so that his wife could go register in the hotel. My family was in the SUV and I backed out. You literally could not see the car parked where it was and I rode up on his hood a little. I claimed that it was his fault for parking illegally and being out of the normal lane of the parking lot (remember he was at a 45 degree angle). He argued I was the person pulling out and should have known he was there (he pulled in after I had gotten in the SUV). The insurance companies declared it a no-fault (actually 50/50 fault) and each took care of their own client’s damage.

[kidchameleon]

@Squink

I made it a bit extreme for the purpose of clarity. All our insurance rates are affected by the average vehicle price, and the mere existence of high priced vehicles raise the rates of even those who drive 15 year old beaters.

You know, I’m looking for insurance for my new car, so I just played around with the quotes on Geico. If I have $50k of property insurance it’s $101.70 for 6 months. If I claimed poverty and dropped it down to $25k claiming that folks on the road should have cheaper cars I’d only pay $99.70 for 6 months. Wow, a whole $2 over 6 months.

And who’s really to say how expensive of cars people should be buying? You’ll have folks clamoring for $100k to cover almost any car while others will say that $1k is sufficiant. Me? I’d be covered if someone with $10k of insurance hit my car, but damn if I ever buy a new one I don’t want to be screwed because the guy wasn’t able to pay for his actions.

Hmmm, perhaps I should go to $100k…

[enipla]

@kidchameleon

And who’s really to say how expensive of cars people should be buying? You’ll have folks clamoring for $100k to cover almost any car while others will say that $1k is sufficiant. Me? I’d be covered if someone with $10k of insurance hit my car, but damn if I ever buy a new one I don’t want to be screwed because the guy wasn’t able to pay for his actions.

Hmmm, perhaps I should go to $100k…

Agreed, My next car will be about 30-35g. I know what kind of vehicle I need. That’s what a new one will cost. And I will be paying more for insurance, and registration.

[stpauler]

FYI: New Hampshire, Tennessee and Wisconsin do not have compulsory auto insurance liability laws.

[Voyager]

@SaintCad

My understanding (which could be wrong) is that no-fault insurance drives up the rates for good drivers. The grandma who only uses her car to drive 3 blocks to the store twice a week and has never had an accident has to subsidise the maniac 20-something in his hot-rod whos had five accidents in the last month.

You’re wrong. No fault just covers which insurance company pays. Even in a no-fault state, the insurance company is free to raise the rates of its clients who have had more than their share of accidents. In New Jersey, when they went from a no-fault system with a ridiculously low lawsuit threshold to one with a more reasonable threshold, insurance costs plummeted for me, who was considered a good driver.

Insurance companies can settle anyway they want to. For instance, things are very easy if both cars in an accident are covered by the same company. No lawsuits there!

Again, the savings from no-fault comes from the elimination of court costs and lawyer fees.

[Driver8]

@light strand

I have to admit that I don’t really understand auto insurance. What I don’t get, is why we each don’t carry coverage for our circumstances alone. What difference is it who is at fault, especially when states like MI have no-fault anyway?

If it was my world and I hit an uninsured driver, my insurance replaces my car, and my health, and the other guy is SOL. He should have had insurance. On the other hand, if an uninsured driver hits me my insurance replaces my car, and my health, and the other guy is SOL. He should have had insurance. See how easy?

Um, no. This completely removes you from any responsibilities for your actions. You’re basically saying if you destroy someone else’s car you are not in any way liable. I reject this as unjust. If you are at fault you should be responsible for restoring the other person’s health and property to the state it was before your clumsy actions.

Your theory seems very similar to scratching someone’s car in the parking lot and just driving off.

[Saint_Cad]

@Fear Itself

Two uninsured drivers collide? Sounds like a match made in heaven, and no skin off your nose. Or do you still have a beef with them, just on general principles?

I’m not talking about two uninsured motorists colliding. I’m talking about one uninsured motorist hitting another one. Why should the one who was not at fault have to pay for damages even if he was not carrying insurance?

This is my point about the issue. If someone is driving around without insurance and they cause an accident, they are forcing someone else to pay for damages they cause, either the other driver or the other driver’s insurance company. Sure they can sue, but if you don’t have insurance because you can’t afford it - how much money will the other party win in a lawsuit.

[light_strand]

@Driver8

Um, no. This completely removes you from any responsibilities for your actions. You’re basically saying if you destroy someone else’s car you are not in any way liable. I reject this as unjust. If you are at fault you should be responsible for restoring the other person’s health and property to the state it was before your clumsy actions.

Your theory seems very similar to scratching someone’s car in the parking lot and just driving off.

What I’m saying is that since clearly there are states who do not assign blame (like MI) and are no-fault, then why should it be necessary to carry insurance, if your own insurance is going to have to pay anyway? For example: When I lived in MI and hit someone, we both made claims to our insurance companies, who in turn, repaired our vehicles. My insurance rates went up, because technically I was “at fault”, but each claim was made against our own companies. Later, when I was hit, we both made claims to our insurance, which in turn, repaired our vehicles. Because I was not “at fault”, my insurance did not go up.

You see, here’s the thing. I’m more in favor of covering my ass, than I am assigning blame. I want my car repaired, and I don’t give two hoots about you. In my experience, most car accidents are no-ones fault anyway. If you have to assign fault, it’s either the guy who drove away, or the weather/traffic/conditions/etc.

[Finagle]

@light strand

What I’m saying is that since clearly there are states who do not assign blame (like MI) and are no-fault, then why should it be necessary to carry insurance, if your own insurance is going to have to pay anyway? For example: When I lived in MI and hit someone, we both made claims to our insurance companies, who in turn, repaired our vehicles.

You are making the assumption that all accidents are car-to-car. In the case of car-to-bike or car-to-pedestrian or even car-to-someone’s-house, you can cause a lot of damage in what is not a no-fault situation.

Further, if you do get horribly mangled in a car wreck, don’t have insurance, and aren’t considerate enough to pass away on the spot, who pays for your medical treatment?

[redtail23]

Anecdotal evidence:

Oklahoma passed laws requiring insurance around 25-30 years ago. There are minimum coverage requirements. Insurance is required in order to get a car tag or a driver’s license. You are asked for insurance when stopped for any reason. Driving without insurance results in fines and/or suspension of driver’s license. In some cases, they tow the car. Insurers are required to notify the DMV whenever a policy is dropped/lapsed, causing automatic suspension of the driver’s license.* Driving with a suspended license results in a trip to jail.

The justification when the law was passed was the large number of uninsured motorists, which was quoted at the time as 30% of drivers. I remember the discussions because my uncle was hit by an uninsured driver shortly before the legislation was brought up, so I was already aware of the issue.

I believe legislation was passed since then requiring uninsured motorist coverage, because of the high number of uninsured drivers.

Oklahoma recently (within the last few months) passed a law mandating higher coverage levels for all drivers, once again due to the high number of uninsured drivers - again quoted as 30% of drivers.

What further laws and/or more draconian penalties would you suggest to force people into paying for something that they either don’t want or can’t afford? It seems fairly evident to me that legislation hasn’t fixed the problem; I seriously doubt that more legislation (particularly legislation that increases the cost of insurance) will help either. It seems to me that if it was a matter of penalties, there would be a least a few percent less uninsured drivers now than 30 years ago - but that’s not the case.

My insurance rates have steadily increased over the past 25 years, despite a fairly good driving record. I’d go for no-fault in a flash, if it would help keep rates down. (Not that I trust it would work - medical insurance rates have nothing to do with insurance company claims expenditures; I see no reason to believe that auto insurance rates are any different.)
Those of you arguing for higher penalties for uninsured drivers - would you go for no-fault if it would drop rates? Or is it more important to punish someone for not doing what you want them to?

*I’ve known several people that were unknowingly driving on a suspended license due to errors at either the insurance company or the DMV. (For example, a policy allowed to lapse because the car was not being driven and driving coverage was provided under a different policy. The DMV had the info on the first change, but not the second.) It’s a quaint system - your license is automatically suspended, and eventually they may get around to sending you a letter to let you know. According to DMV staff, this can take from a few days to a few weeks, you know, depending on how busy they are. Of course, if you get stopped during this period, you still go to jail - ignorance is no excuse, after all.

[Bill_Door]

@dalej42

One good reason for the harsh penalites is that I think it will show that the state takes the crime seriously. If the penalty for drunk driving was a $100 fine, I’d drive drunk all the time.

I’m going to go out on a limb and say you’re not typical. I think the severity of the penalty is less important than its likelihood. If the penalty for drunk driving was only $100, bit you got caught every time, I bet you’d stop. On the other hand, the current severe penalties with excellent odds of getting away with it, results in a lot of offenders.

Look at the simple “rolling stop”. You slow down, look, and roll through a stop sign at 5 mph. The penalty for that can amount to fines greater than $100, plus the points on your license, and higher insurance costs, yet people do it all the time because they don’t get caught. If there was a simple $10 fine and you had a high likelihood of getting caught, most people wouldn’t do it.

The trick to modifying people’s behaviour is not in severely punishing the 1 in a thousand you catch, it is in catching more people.

[Driver8]

@light strand

What I’m saying is that since clearly there are states who do not assign blame (like MI) and are no-fault, then why should it be necessary to carry insurance, if your own insurance is going to have to pay anyway? For example: When I lived in MI and hit someone, we both made claims to our insurance companies, who in turn, repaired our vehicles. My insurance rates went up, because technically I was “at fault”, but each claim was made against our own companies. Later, when I was hit, we both made claims to our insurance, which in turn, repaired our vehicles. Because I was not “at fault”, my insurance did not go up.

You see, here’s the thing. I’m more in favor of covering my ass, than I am assigning blame. I want my car repaired, and I don’t give two hoots about you. In my experience, most car accidents are no-ones fault anyway. If you have to assign fault, it’s either the guy who drove away, or the weather/traffic/conditions/etc.

I don’t believe an automatic no-fault policy is just. There are circumstances where no one can be blamed, I can understand that. And in those cases anyone who has no insurance is stuck. I have no problem with that.

In the case where your recklessness or lack of concentration causes damage to someone else’s property, I believe that you should be held responsible. Whether that means you pay for it yourself or you have an insurance policy that you pay for that covers the situation where you damage other people’s stuff is up to you. As other people have mentioned, there exists the case where you could injure pedestrians. Who pays their medical bills?

[Gfactor]

@Driver8

As other people have mentioned, there exists the case where you could injure pedestrians. Who pays their medical bills?

Personal injury protection benefits will be paid even when a family member is a passenger in another person’s car or is a pedestrian when an accident takes place. The personal injury protection coverage of your no-fault policy also covers anyone who does not have a no-fault policy and is hurt as a passenger or pedestrian in an accident involving your car. It will also cover a motorcyclist who is hurt in an accident involving your car.

http://www.michigan.gov/documents/cis_ofis_ip202_25083_7.pdf (pdf)

Here are the statutes:

Sec. 3114.

(1) Except as provided in subsections (2), (3), and (5), a personal protection insurance policy described in section 3101(1) applies to accidental bodily injury to the person named in the policy, the person’s spouse, and a relative of either domiciled in the same household, if the injury arises from a motor vehicle accident. A personal injury insurance policy described in section 3103(2) applies to accidental bodily injury to the person named in the policy, the person’s spouse, and a relative of either domiciled in the same household, if the injury arises from a motorcycle accident. When personal protection insurance benefits or personal injury benefits described in section 3103(2) are payable to or for the benefit of an injured person under his or her own policy and would also be payable under the policy of his or her spouse, relative, or relative’s spouse, the injured person’s insurer shall pay all of the benefits and is not entitled to recoupment from the other insurer.

http://www.legislature.mi.gov/(ptanoyah5g3aop452rgpib2o)/mileg.aspx?page=GetMCLDocument&objectname=mcl-500-3114

500.3115 Priorities as to claims of persons not occupants of vehicle; partial recoupment; limitation on benefits.

Sec. 3115.

(1) Except as provided in subsection (1) of section 3114, a person suffering accidental bodily injury while not an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority:

(a) Insurers of owners or registrants of motor vehicles involved in the accident.

(b) Insurers of operators of motor vehicles involved in the accident.

(2) When 2 or more insurers are in the same order of priority to provide personal protection insurance benefits an insurer paying benefits due is entitled to partial recoupment from the other insurers in the same order of priority, together with a reasonable amount of partial recoupment of the expense of processing the claim, in order to accomplish equitable distribution of the loss among such insurers.

(3) A limit upon the amount of personal protection insurance benefits available because of accidental bodily injury to 1 person arising from 1 motor vehicle accident shall be determined without regard to the number of policies applicable to the accident.

http://www.legislature.mi.gov/(ptanoyah5g3aop452rgpib2o)/mileg.aspx?page=GetMCLDocument&objectname=mcl-500-3115

This case (pdf) discusses some of the issues.