The State of Nevada would soon be using auto insurance — or more appropriately the lack thereof — in order to help augment the state’s budget deficiency. Thus, if a vehicle has no insurance or no registration, it would likely be the target of a new verification system set to take effect on March 15 this year.
According to Lynn Hettrick, the state would hire a Chicago-based company in order to find-out if a vehicle has the necessary registration and insurance coverage as required by the state. Hettrick, who works as Governor Jim Gibbons’ deputy chief of staff, said that the program may raise revenue to as much as $100 million. It must be noted that last year, the Legislature had already considered entering into an agreement with InsureNet if not for the Department of Motor Vehicles’ (DMV) disagreement with the provisions of a law that would enable the contract. Among other things, it argued that the bill would allow InsureNet to qualify alone, thereby giving the latter a big advantage in the financial negotiations. There were also fears regarding privacy.
But according to InsureNet’s president Jonathan Miller, the privacy issue is unfounded as there is no proof that the company is going to make the information available to third parties. With the use of cameras, or as the company refers to it as scanners, it only takes about 60 seconds before the verification could be done. Miller also explained that such could be set-up on law enforcement vehicles or on streets to check license plates of cars.
The company would start its operations this year starting with the putting-up of a bond amounting to as much as $100 million. It is expected to earn up to $160 million from penalties assessed against uninsured drivers for the first year alone. InsureNet, by using “instant insurance status verification,” claims that it could address the problem of losses in revenue due to “fraudulent practices and insufficient or correct data” brought about by the poor monitoring of auto insurance coverage amongst drivers. To date, the company has been verifying insurance in Venezuela and Antigua for quite some time now. It is also implementing systems in two states in the U.S.
DMV officials on the other hand, acknowledges the fact that the current system they use to verify if a driver has an updated insurance or not usually takes up to 45 days for confirmation, making it outdated and inefficient. Add to this, data released by insurance insiders indicate that up to 20 percent of vehicles all over the nation are presently uninsured.