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The Honolulu Advertiser
Posted on: Monday, July 21, 2003

Database won't solve uninsured driving

By Michael Onofrietti
President of the Hawaii Insurers Council

Hawai'i's average expenditure for auto insurance for 2000 was $700, or 17th highest in the nation. In 1996, we were fourth highest, when the average was $959. Now there is talk of implementing a computer database to catch uninsured drivers so that the overall insurance burden would go even lower. Implementing such a system would be expensive and add to insurance and enforcement costs.

There are two types of costs involved in implementing this type of program:

• The government would incur costs to develop and maintain the database. These costs would be borne by taxpayers.

• Each insurer would incur costs to establish a program to transfer the data and resolve disputes. Depending on the type and depth of information required, start-up costs could range from $80,000 to over $500,000 per insurer. These costs would be borne by those who purchase insurance.

A computer database that contains license plate numbers of insured motor vehicles or vehicle identification numbers would not reduce the number of uninsured motorists. The American Association of Motor Vehicle Administrators says that "Between the 1989 and 1999 Insurance Research Council studies of the 18 states with reporting programs in place for five years or more, 12 showed an increase in uninsured motorists and six experienced improvement."

The latest study shows Hawai'i's uninsured motorist population has dropped to 10 percent of all drivers. Studies from 1984, 1989, 1999 and 2000 show the uninsured motorist population has remained fairly steady, at about 14 percent.

The theory of the database matching system is that insuring those who refuse to purchase insurance would reduce the cost of vehicle insurance. Members of the Hawaii Insurers Council, who insure over 70 percent of the personal motor vehicles in Hawai'i, disagree.

The Honolulu Police Department has told the Legislature it already identifies uninsured drivers, so the ability to identify uninsured motorists is a non-issue. Enforcement, or lack thereof, is the key. Without threat of serious sanctions, there is no economic incentive for an uninsured motorist to buy insurance.