Americans who wish to trade in their old gas guzzlers must have active insurance for the past twelve years, the Insurance Information Institute or I.I.I. said earlier this week.
Under the federal government’s Car Allowance Rebate System (CARS), car owners who want to collect money from trading in their old vehicles must have proof that their vehicles had insurance a full year before the trade-in. The program is popularly known as the “cash for clunkers” initiative.
To implement this policy, the National Highway Traffic Safety Authority (NHTSA) has issued guidelines for interested car owners. According to the NHTSA, drivers can present any of the three accepted proofs of insurance.
Car owners can provide one or more insurance cards as proof of insurance upon trade-in. The cards, however, must contain important data like the car’s make, model, the year it was manufactured, and the vehicle’s identification number. However, the cards should all show that the car was insured for the previous 12 months.
Insurance policy papers or documents can also serve as proof of insurance according to the NHTSA. Ideally, the document’s declaration pages should be intact. The papers should also have all the data necessary to make a valid assumption of the vehicle’s insurance.
Insurance companies can also provide car owners with signed letters signifying that the vehicle has been indeed insured 12 months prior to the trade-in. The NHTSA points out that it will only recognize signed certifications printed on paper with the company’s letterhead. The letter should also contain complete information about the vehicle, including its make, model, manufacturing date, and identification number.
Even with any of the three proofs, car owners must also certify and signify that their vehicles have been insured for the past year. This would bind them legally to any documents or information they have provided the NHTSA.
The NHTSA came up with the eligibility requirements after consulting with the Insurance Information Institute, the National Association of Mutual Insurance Companies, and the American Insurance Association. The organizations provided crucial support and information to the NHTSA during the formulation of the requirements.
Dr. Robert Hartwig, an economist from the I.I.I., says that car insurance companies will play a vital role in the success of the CARS program. The said initiative is expected to remove some 250,000 gas-guzzling vehicles off the nation’s roads. Hartwig hopes that car owners who trade-in their old cars will buy more economical and fuel-efficient cars.