Insured vehicle checking on way
JACKSON — A contractor projects that a system to instantly verify whether Mississippians have auto insurance would lead to fines of more than $150 million a year being collected over the program’s first three years.
The computer system was supposed to launch July 1 but was delayed by a vendor selection dispute. Now, it isn’t scheduled to roll out statewide until early 2014.
The system is meant to allow county tax collectors and law enforcement officers to check whether someone has auto insurance. But it’s also supposed to eventually generate automatic tickets to anyone whom records indicate hasn’t bought a policy.
That wrinkle isn’t present in some other states that have moved to online insurance verification.
Motorists are required to carry auto insurance under Mississippi state law. However, a 2009 study by the Insurance Research Council estimated that 28 percent of Mississippi drivers are uninsured, the most in the nation. That’s double the estimated nationwide uninsured rate of 14 percent.
Uninsured motorists are a problem because those who do buy coverage end up paying extra premiums to cover damage caused by those who go without.
Right now, law enforcement officers have to rely on paper cards distributed by insurance companies to determine whether someone has coverage. But that system is easily fooled by someone buying six months of insurance and canceling the policy after receiving a card. There are also isolated cases of people forging insurance cards, according to prosecutors.
The idea behind the verification system is that insurers would send in records of who has a policy at any moment, allowing
police officers to check a motorist’s status at the traffic stop. The 2012 law that set up the system also mandates that county tax collectors use the system and refuse to sell a license plate to anyone who is uninsured.
Uninsured motorists would also be cited during traffic stops.
In a Jan. 7 award letter, the Mississippi Department if Information Technology Services said the winning contractor projects the state will net revenue of $464.9 million over three years, after expenses to run the computer system and send out mailings. DPS spokesman Warren Strain said Validati, a unit of the Pasco Group of Hudson, Ohio, would make 2 cents a month for each of the roughly 2.5 million registered vehicles covered under the law to run the computer system, which works out to about $600,000 a year. The law says the company can also collect fees for generating and mailing letters to people the system believes are uninsured.
It’s unclear how many letters will be mailed, but if Validati’s revenue projections hold true, it will be a large number. The new law calls for fines of $300 for a first offense, followed by a fine of $400 the second time and $500 each time thereafter. That seems to project between 300,000 and 500,000 tick- ets a year will result in paid fines.
Mississippi’s law envisions a six-month testing period, which Magee said is scheduled to begin Oct. 20. That would be followed by a statewide rollout in early 2014.
Magee said he believed the number of citations would fall as more people got insurance.
The fine collections and number of tickets each appear to be a huge jump over current levels. In 2011, Mississippi officials wrote 47,689 uninsured motorist citations, with 18 percent dismissed or found not guilty, according to answers ITS provided to vendor questions. Courts collected $9.4 million in fines, with the average fine running about $290.