New online systems track outlaws


IMBR-00208194-001Uninsured motorists can be tracked down by the new online systems. It is a pressing issue for the state to know how many uninsured drivers are on the road. According to data compiled over the past decade by the Insurance Research Council, about one in seven drivers or vehicle owners have no insurance.

Consider this situation, a party that has no insurance when met an accident, the injured parties will shoulder the burden. Loren McGlade, the chairman of insurance companies stated that some states use random sampling where they send a list of vehicle to insurance companies and confirm whether they are insured. Also, other states require insurance companies to provide their list of current customers-“book of business” where they need to update weekly or monthly those databases.

McGlade said, “we had 26 states with some electronics methodology and 26 different ways of doing it.” A nightmare for insurance company to keep all these systems and policyholders pay the price through higher premiums. There are instances that getting information sparks countless faulty red flags where one gets letter from the state asking him why he doesn’t have car insurance. The person involved will asked why it messed up. All because a state’s database can’t match vehicle registrations to insurance records, insurance companies end up fielding calls from angry customers.

On an initial data load, at least 20% of the data will mismatch, McGlade added. About half of the states use no electronic reporting system that can track uninsured vehicles in that case. According to Alex Hageli, director of personal lines for the Property casualty Insurers Association of America, they rely on insurance identification cards which can be altered easily. Problems also rise when some buy insurance and then cancel it or let it lapse. Aside from that, differences of systems and databases are one of the problems. These systems don’t reduce the number of uninsured drivers, because they tell a state who has insurance, not who doesn’t. In short, the insurance industry has no idea who is insured.

Uninsured drivers must be recognized to lessen difficulty of imposing law. As a moving target, it is hard to identify them; their number fluctuates depending on when premium payments are due, vehicles that get traded, the issuance of new policies and the lapsing of old ones.  

Now, new system referred as “Web services” is used in online verification. Loren McGlade, the chairman of insurance companies and Alex Hageli, director of personal lines for the Property casualty Insurers Association of America see the potential of this. The system allows a police officer to find out whether a driver is currently insured or not.

In comparison with the static libraries names, web services provide dynamic “event-based” queries. According to Laura Rogers, a program manager with the Florida Department of Highway Safety and Motor Vehicles, three years ago, Florida officials experimented successfully with Web services on a limited, in-house basis for about six months.

Rogers added that the results proved the system provided greater accuracy than the current (database) system, and faster. She says there’s a good chance Florida will resume its pilot as soon as next year.

With this, the state can impose fine to those uninsured. Fines issued to offenders can be a lucrative source of revenue. But having all of these systems if the state will not enforce law, in the end it’s nothing.