June 11, 2011

New State Laws Aimed At Uninsured Drivers

State insurance law in every part of the United States requires drivers to carry insurance when operating a motor vehicle. Although the amount of insurance required by each state varies, every state insists that motorists need to have a way to pay for the cost of an accident, in many cases with liability insurance which pays for damages to other drivers, their passengers and their property. Unfortunately, uninsured drivers throw a wrench into the mix, but many states are looking into ways to punish uninsured drivers with stronger laws.

Some state insurance law measures are aimed at verifying driver insurance coverage with new technology and stronger highway enforcement. In Mississippi and Alabama, proposed measures would allow car insurance companies to submit the names of their drivers to a state database, which would be compared to registered drivers in the state. If a driver isn't verified by the computer system, the states may send the driver a warning or a letter inquiring as to why the driver doesn't have insurance. Other states have "no pay, no play" laws, which stop an uninsured motorist from receiving damages in an accident. This provides a strong incentive to stay insured, although opponents have argued that it limits the rights of uninsured drivers to collect.

A recent decision by New Jersey's Supreme Court goes a step further, preventing uninsured passengers from suing for damages in an accident. The case involved a woman who sustained injuries as a passenger who sued the at-fault driver in the accident; the case was dismissed, as the New Jersey Supreme Court decided that uninsured motorists cannot sue for damages as passengers, as this falls under the definition of "operating" a motor vehicle in the state. While the decision is somewhat controversial, it should inspire drivers and passengers in the state to look for personal injury protection coverage, which can cover medical bills for a policy holder, even when the policy holder is a passenger. New Jersey's ruling is intended to enforce its system of insurance, which requires PIP coverage for insurance claims and lawsuits, and to compel all drivers and passengers to pay for their own costs in an accident and to stay insured.

As states push more aggressive state insurance law requirements that punish uninsured drivers, insured drivers are becoming better protected. They're less likely to foot the bill in accidents with uninsured or underinsured motorists and can rely more on their insurance coverage to keep them protected. The incentives for buying an appropriate amount of car insurance and keeping up an adequate level of coverage become stronger each year, and overall, this is a good trend for responsible drivers across the country.