Topic:
AUTOMOBILE INSURANCE; NO-FAULT INSURANCE; TRAFFIC ACCIDENTS;
Location:
INSURANCE - MOTOR VEHICLE;

OLR Research Report


January 31, 2008

 

2008-R-0045

DRIVING WITHOUT AUTOMOBILE INSURANCE

By: Janet L. Kaminski Leduc, Associate Legislative Attorney

You asked for information regarding uninsured drivers. Specifically, you asked for the (1) number and percentage of Connecticut licensed drivers without automobile insurance, (2) percentage of accidents involving an uninsured driver and how many were the fault of an uninsured driver in the past three years, and (3) all possible penalties under state law for driving without insurance and if these increase if the uninsured driver injures someone.

You also asked if there are state resources available for a person an uninsured driver injures, and what state law or regulation permits insurance companies to increase insurance rates for a driver involved in an automobile accident, but who is not at-fault.

SUMMARY

All states have laws that require motorists to show proof of their financial ability to pay for personal injury and property damage to others in the event of a motor vehicle accident (i.e., financial responsibility). Most drivers satisfy this obligation by purchasing auto accident insurance. But some either cannot afford insurance or simply choose to ignore the requirement. Uninsured (and underinsured) drivers are typically unable to cover the cost of a serious accident.

The Insurance Research Council, an independent, nonprofit research organization, estimates that 12% of Connecticut's licensed drivers are uninsured compared to 14.6% nationally. Based on that estimate, there could be an estimated 296,195 uninsured drivers in Connecticut. Because accident data is incomplete with respect to a driver's insurance status, we are unable to accurately estimate the number of accidents involving or caused by uninsured drivers. Based on IRC data, we can surmise that the number is something less than 11,700.

According to the Connecticut Judicial Department data, there were 68,232 instances in FYs 2005 – 2007 in which a person was cited for operating a vehicle without the required proof of financial responsibility or insurance under CGS 14-213b. Of these, 683 (1%) resulted in convictions; 5,266 (8%) entered guilty pleas; and 51,372 (75%) were nolles (i.e., not prosecuted). Bond was forfeited in 440 (1%) of cases, and in 10,461 (15%) cases the person cited failed to appear (FTA) in court. Judicial reports FTA cases to the Department of Motor Vehicles (DMV), which issues notices of license or registration suspension for an indefinite time period to the motorist. If he or she resolves the case with the court, DMV will consider a reinstatement request from the person.

The Judicial Department data also shows that for the same three fiscal years, there were 20,259 citations for failure to insure a private motor vehicle under CGS 38a-371. Of those, there were 136 (1%) convictions; 502 (2%) guilty pleas; 2,355 (12%) FTAs; and 17,233 (85%) nolles.

There are several statutes and possible penalties related to uninsured drivers. The penalties do not increase for an uninsured driver who injures another person.

A vehicle owner who violates CGS 14-213b is subject to a fine of at least $100 but no more than $1,000. However, an owner of a vehicle with a commercial registration who knowingly operates or permits the operation of the vehicle without the required insurance is guilty of a class D felony (a fine of up to $5,000, imprisonment up to five years, or both). In addition, the person is subject to a registration and license suspension of one month for a first conviction and six months for subsequent convictions.

A person who violates CGS 38a-371 is guilty of a class C misdemeanor (a fine of up to $500, imprisonment up to three months, or both).

Failure to carry a vehicle's automobile insurance identification or other proof of financial responsibility in the vehicle is subject to a $35 fine for the first offense and up to a $50 fine for subsequent offenses (CGS 14-13). (Note that many infractions and other types of violations are subject to one or more surcharges, fees, or assessments based on, or added to, the actual fine, and thus the total amount due is often higher than the base fine. For example, in many cases, if the offense occurs in a marked construction zone, utility work zone, or school zone, an additional amount equal to 100% of the base fine must also be paid.)

Based on information insurers routinely provide to DMV, a registered vehicle owner who is not maintaining the required insurance is subject to a license suspension. The owner may enter into a consent agreement with DMV, procure the necessary insurance, and pay a civil penalty of $200 in lieu of the suspension. If, after 30 days from the registration suspension, the owner has not entered a consent agreement, cancelled the registration, or transferred ownership of the vehicle, DMV may suspend the owner's driver license (CGS 14-12g).

If a police officer observes an uninsured vehicle that has a suspended registration being operated on a public highway or parked in a parking area, the officer may confiscate the license plates and impound the vehicle (CGS 14-12h).

We are unaware of any state resources for people injured by uninsured drivers. But state law requires automobile policies to include uninsured and underinsured motorist coverage (CGS 38a-336). The general purpose of such coverage is to minimize losses caused by vehicles for which the owner has not secured any or enough insurance.

With regard to automobile insurance policy rates for an insured, not-at-fault vehicle owner, an insurer is prohibited from imposing a premium surcharge for the first or second accident within the policy's experience period for which the person was not-at-fault and not convicted of a moving traffic violation (CGS 38a-686(b)(3)). However, the automobile insurance underwriting process is quite complex such that a not-at-fault accident may affect a person's automobile insurance policy premium depending on the insurer's particular underwriting system, including the rating models and algorithms it uses.

UNINSURED DRIVERS

Percentage of Total Drivers

An estimated 12% of Connecticut's licensed drivers are uninsured, compared to 14.6% nationally (Insurance Research Council, Uninsured Motorists, 2006 Ed., which examined trends from 1999 to 2004). The five states with the highest uninsured driver estimates are Mississippi (26%), Alabama (25%), California (25%), New Mexico (24%), and Arizona (22%). The five states with the lowest uninsured driver estimates are Maine (4%), Vermont (6%), Massachusetts (6%), New York (7%), and Nebraska (8%).

The IRC further estimates on a national basis that one in seven at-fault drivers in a collision with another vehicle (i.e., a multi-vehicle accident) are without insurance.

IRC estimated the uninsured driver population using a ratio of insurance claims made by individuals who were injured by uninsured drivers to claims made by individuals who were injured by insured drivers. They analyzed data from 11 insurers, representing about 58% of the U.S. private passenger automobile insurance market.

Number of Uninsured Drivers

The number of active drivers' licenses issued statewide as of December 31, 2007 is 2,468,293, according to the DMV. Applying the IRC's estimated 12% rate of uninsured drivers, there could be an estimated 296,195 uninsured drivers in Connecticut.

Accidents

By law, any police officer, agency, or individual that investigates a “reportable motor vehicle accident” must forward one copy of the police accident report to the Connecticut Department of Transportation (DOT) upon completion of the investigation. A “reportable motor vehicle accident” is one in which (1) any person is killed or injured or (2) damage to any person's property exceeds $1,000 (CGS 14-108a).

Connecticut had 81,770 reported motor vehicle accidents in 2004 (Connecticut Traffic Accident Facts, 2004, Connecticut Department of Transportation). Of those, 50,630 were property damage only accidents, 30,860 were injury accidents, and 280 were fatal accidents.

Accident data is not available with respect to the number of accidents involving or caused by uninsured drivers. The Connecticut Department of Public Safety informed OLR in 2004 that lack of insurance is not necessarily a cause of or contributing factor to an accident. As a result, the DPS Crime Analysis Unit, which compiles accident statistics, does not capture the incidence of motor vehicle accidents caused by uninsured drivers.

Recall that the IRC estimates that one in seven at-fault drivers in a multi-vehicle collision is uninsured. A significant portion of the reported accidents in Connecticut involve only one vehicle and are not, therefore, multi-vehicle accidents. If all 81,770 reported accidents in 2004 were multi-vehicle accidents, then applying IRC's one-to-seven ratio would estimate that 11,681 accidents could have involved uninsured at-fault drivers. Since not all were multi-vehicle accidents, we know that an actual best estimate for the number of accidents involving uninsured at-fault drivers is something (perhaps significantly) less than 11,681.

Offenses and Dispositions

The Connecticut Judicial Department compiles data on criminal offenses, including the illegal operation of a motor vehicle without minimum insurance (CGS 14-213b) and failure to insure a private motor vehicle (CGS 38a-371). Tables 1 and 2 provide offenses by disposition for these statutes for fiscal years 2005 through 2007.

Table 1: Illegal Operation of a Motor Vehicle without Minimum Insurance (CGS 14-213b)

 

Fiscal Year 2005

Fiscal Year 2006

Fiscal Year 2007

Three-year TOTALS

TOTAL OFFENSES

24,135

22,392

21,705

68,232

Convictions

413

210

60

683 (1%)

Guilty Pleas

1,991

1,574

1,701

5,266 (8%)

Bond Forfeiture

177

146

117

440 (1%)

Failure to Appear

3,944

3,337

3,180

10,461 (15%)

Jury – Guilty

1

0

0

1

Jury - Not Guilty

0

0

0

0

Judge – Not Guilty

0

8

1

1

Nolles (not prosecuted)

17,609

17,117

16,646

51,372 (75%)

Table 2: Failure to Insure a Private Motor Vehicle (CGS 38a-371)

 

Fiscal Year 2005

Fiscal Year 2006

Fiscal Year 2007

Three-year TOTALS

TOTAL OFFENSES

7,085

7,145

6,029

20,259

Convictions

61

45

30

136 (1%)

Guilty Pleas

139

174

189

502 (2%)

Bond Forfeiture

12

11

8

31 (0%)

Failure to Appear

947

806

602

2,355 (12%)

Jury – Guilty

0

0

0

0

Jury - Not Guilty

0

0

1

1

Judge – Not Guilty

0

0

1

1

Nolles (not prosecuted)

5,926

6,109

5,198

17,233 (85%)

PENALTIES

The penalties for not maintaining the required automobile insurance are detailed below. The penalties do not increase based on whether the uninsured driver is found at-fault for an accident or causes injury to a person or property.

For purposes of applying CGS 14-213b, 38a-371, and 14-13 and the penalties contained therein, the definition of “private passenger motor vehicle” included in CGS 38a-363(3) applies (CGS 38a-364). As such, a private passenger motor vehicle does not include a motorcycle or motor vehicle used as a public or livery conveyance. But it does include a:

1. private passenger automobile;

2. station-wagon-type automobile;

3. camper-type motor vehicle;

4. high-mileage-type motor vehicle;

5. truck-type motor vehicle with a load capacity of 1,500 pounds or less, registered as a passenger motor vehicle or a passenger and commercial motor vehicle or used for farming purposes; and

6. vehicle with a commercial registration.

Operating Vehicle Without Insurance (CGS 14-213b)

The owner of a private passenger motor vehicle or vehicle with a combination or commercial registration that is registered or required to be registered in Connecticut is prohibited from operating or permitting the operation of the vehicle without maintaining the insurance required by law. Failure of the vehicle operator to produce an insurance identification card constitutes prima facie evidence that the owner has not maintained the required insurance.

A person who violates this statute is subject to a fine of at least $100 but no more than $1,000. However, an owner of a vehicle with a commercial registration who knowingly operates or permits the operation of the vehicle without the required insurance is guilty of a class D felony (a fine of up to $5,000, imprisonment up to five years, or both).

In addition, the law requires the DMV to suspend the vehicle owner's registration and driver's license for one month for a first conviction and six months for subsequent convictions. The DMV is prohibited from restoring a person's license until he or she has provided evidence of having the required insurance for each motor vehicle registered in his or her name. A person whose license and registration have been suspended must also pay a $250 restoration fee before DMV will restore the license and registration (CGS 14-50b).

Failing to Maintain Insurance on a Private Motor Vehicle (CGS 38a-371)

The owner of a private passenger motor vehicle required to be registered in Connecticut who operates it or permits it to be operated without maintaining the insurance required by law is guilty of a class C misdemeanor (a fine of up to $500, imprisonment up to three months, or both).

Failing to Carry Proof of Insurance or Registration (CGS 14-13)

A vehicle owner must carry a vehicle's automobile insurance identification card and registration in the vehicle at all times. The first offense is an infraction subject to a $35 fine. A subsequent offense is subject to a fine up to $50. (Because a subsequent offense is not an infraction, a court appearance is required.)

Suspended Registration for Failing to Maintain Insurance; Suspended License (CGS 14-12g)

Insurers notify DMV monthly of automobile insurance policies cancelled in the preceding month (CGS 38a-343). If DMV determines that the owner of a registered vehicle is not maintaining the required insurance, it issues the owner a notice of registration suspension and provides an opportunity for a hearing. If the owner does not contest the determination, he or she enters into a consent agreement with DMV, procures the necessary insurance, and pays a civil penalty of $200 in lieu of the registration suspension.

If, 30 days after the registration suspension, the owner has not entered a consent agreement, cancelled the registration, or transferred ownership of the vehicle, DMV may suspend the owner's driver license.

Impounded Vehicle for Suspended Registration (CGS 14-12h)

DMV maintains a record of all registrations suspended for failure to maintain insurance and makes the information, including related license plate numbers, available to the police. If a police officer observes an uninsured vehicle that has a suspended registration being operated on a public highway or parked in a parking area, the officer may confiscate the license plates and impound the vehicle. The vehicle owner cannot regain possession of the vehicle until he or she has paid a $50 confiscation fee. Any vehicle that is impounded for more than 45 days is subject to forfeiture to the state.

resources for a person injured by an uninsured driver

We are unaware of any current state resources for people injured by uninsured drivers. But state law requires automobile policies to include uninsured and underinsured motorist coverage, which is discussed in more detail below. The general purpose of such coverage is to minimize losses caused by vehicles for which the owner has not secured any or enough insurance. According to the Connecticut Insurance Department, an uninsured motorist claim should be pursued if a person is injured in a collision with an uninsured driver.

uninsured and Underinsured Motorist Coverage

CGS 38a-336 requires all automobile insurance policies to include uninsured and underinsured motorist coverage in amounts not less than the limits specified in CGS 14-112(a) and in accordance with Conn. Agencies Regs. 38a-334-6. The minimum level of coverage permitted

under CGS 14-112(a) for personal injury to, or the death of (1) any one person is $20,000 and (2) more than one person in an accident is $40,000.

Uninsured motorist coverage reimburses costs related to injuries to a person, his or her family members, or passengers if an uninsured or hit-and-run driver collides with his or her vehicle. Underinsured motorist coverage reimburses costs when an at-fault driver has insufficient insurance to pay for a person's total loss. This coverage will also protect a person hit as a pedestrian.

Depending on policy deductibles, limits, and exclusions, uninsured and underinsured motorist coverage may or may not cover all of a person's expenses.

UNDERWRITING AND RATING AN AUTOMOBILE INSURANCE POLICY

A safe driver insurance plan (SDIP) is a list of rules that determines when an insurance company may “surcharge” a person's automobile insurance policy (i.e., increase rates) when the person has been involved in an accident or received motor vehicle violations. By law, an insurer may not impose a surcharge under its SDIP for the first or second accident within the policy's experience period for which the insured was not at-fault and not convicted of a moving traffic violation (CGS 38a-686(b)(3)).

According to the Connecticut Insurance Department, a not-at-fault incident (e.g., not-at-fault accident or comprehensive claim) could still affect a vehicle owner's insurance premium depending on the particular underwriting scheme the insurer uses. The automobile insurance underwriting process considers dozens of variables when establishing a policy's premium rate. Insurers also use complex tiering systems that place individuals in particular classes of insureds. For example, an insurer might classify individuals involved in accidents but who were not-at-fault in one grouping and at-fault drivers in another. Insurers also offer various premium discounts and credits for certain behavior (e.g., claim-free or safe driver credit). Being involved in an accident, though not at-fault, could disqualify a person for certain credits.

As a result, a not-at-fault accident may or may not affect a person's automobile insurance policy premium depending on the insurer's particular underwriting system, including the rating models and algorithms it uses.

JLK:dw