Texas Says Auto Insurance Verification Program on for Early 2008

The Texas Department of Insurance announced that the state’s new auto insurance verification program is expected to operational in early 2008. The technology-based program is designed to allow law enforcement officers to immediately verify whether a person has car insurance.

The Texas Financial Responsibility Verification Program is a joint project authorized by SB 1670 (79th Legislature) and developed by the Texas Department of Insurance (TDI), the Texas Department of Public Safety (DPS), the Texas Department of Transportation (TxDOT), and the Texas Department of Information Resources (DIR).

The goal is to reduce the number of uninsured motorists in Texas, estimated to be between 15-20 percent of all vehicles on the road. Soon, law enforcement officers and other state entities will have at their fingertips immediate, real-time access to insurance information on a given vehicle and/or driver.

Texas law (the Motor Vehicle Safety Responsibility Act) states that a person may not operate a motor vehicle in this state unless financial responsibility is established for that vehicle. Most people do this by buying automobile liability insurance. The law currently requires minimum liability limits of $20,000 per injured person, up to a total of $40,000 for everyone injured in an accident, and $15,000 for property damage (known as “20/40/15” coverage).

However, those limits will change next year. The 80th Texas Legislature recently amended the law by increasing minimum liability limits to $25,000 per injured person, $50,000 for everyone injured in an accident, and $25,000 for property damage (“25/50/25”), to take effect April 1, 2008. After that date, anyone who purchases or renews their automobile liability policy will need to make sure they meet the new minimum liability limits.

“We hope this program can significantly reduce the number of uninsured drivers and relieve responsible drivers of the headaches and costs of uninsured motorist coverage with minimal adverse effects and encourage Texas drivers to make sure their insurance information is up to date and that VIN numbers match the information on their insurance cards,” said Sandra Helin, SIIS Public Affairs Director for the insurance trade group Southwest Insurance Information Service.

According to Helin, the insurance industry opposed the legislation after seeing the unintended consequences this program has caused in other states. Now that the verification program is law, insurers are complying and are working closely with TDI in providing all information requested of them during the implementation process, she said.

“Maintaining a mammoth database on a real time basis can lead to errors and glitches in reporting information that could leave responsible drivers who have valid insurance in the lurch with a fine or impoundment of their vehicle. Any mismatch in data would create a very bad day for the motorist who has kept their insurance up to date,” she said.

Helin noted that more than a dozen cities in Texas have passed ordinances that let police have a vehicle towed and impounded if the driver can’t show proof of insurance.

To find out more about the Texas Financial Responsibility Verification Program, visit the TDI Web Resource Page at www.tdi.state.tx.us/auto/frvp.html.

Source: Texas Department of Insurance