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Computers to Check Car Insurance

Aug 23, 2007

By R.A. Dyer, Fort Worth Star-Telegram, Texas

Aug. 24--AUSTIN -- Police will soon have the technology to automatically verify whether a motorist has valid car insurance. But the new system -- it's officially called the Texas Financial Responsibility Verification Program -- has raised concerns from some industry representatives. It is expected to be operational in early 2008, a year later than originally planned.

How it works

Under the system, insurance information will pop up on the in-car computers of police officers when they check license-plate numbers. The state will pay for the $3.5 million-per-year system through a $1 fee on vehicle registrations. Motorists will still be required to carry their insurance card.

The background

Despite legal prohibitions, as many as 1 in 5 vehicles on the road are driven by uninsured motorists, according to the Texas Department of Insurance. The new program will be implemented by the Insurance Department, the Department of Public Safety, the Texas Department of Transportation and the Texas Department of Information Resources. An Alabama-based firm, HDI Solutions, received the contract to set up the program. HDI will collect information from the insurance companies and eventually post weekly updates.

Other changes

This year, the Legislature increased minimum liability limits to require motorists to get what is known as "25/50/25" coverage. That translates to $25,000 in liability insurance per injured person, $50,000 for everyone injured in an accident and $25,000 for property damage, according to the Insurance Department.

That's a switch from current law that mandates a minimum of "20/40/15" coverage: $20,000 in liability insurance per injured person, up to a total of $40,000 for everyone injured in an accident and $15,000 for property damage.

The change is effective April 1.

By the numbers

16 million: Number of registered vehicles in Texas.

Up to 3.6 million: The number of uninsured motorists in Texas.

$7 million: Amount an Alabama-based data management firm will receive over two years to set up the program.

What they're saying

"The intent of this legislation is to reduce the number of uninsured drivers out there. It also will protect drivers that are doing the right thing. ... The goal is to make this as accurate as possible because we don't want anybody to be accused of not having insurance if they do."

-- Ben Gonzalez, spokesman for the Texas Department of Insurance

"The system has many flaws in other states where [it] has been enacted. Motorists with valid insurance have been pulled over, fined, or sometime had their cars impounded because the [correct] data does not match what the state has" in the database.

-- Sandra Helin, spokeswoman for the Southwestern Insurance Information Service, an industry group

"If this technology is going to do such a great job of cracking down on uninsured motorists, then TDI should mandate reductions in the cost of uninsured motorist protection that we all have. It stands to reason that if TDI is confident that this will lead to fewer uninsured motorists on Texas roads, then the risk of uninsured motorist claims to the insurance industry is less."

-- N. Alex Winslow, executive director of the Texas Watch consumer group

For more information

To find out more about the Texas Financial Responsibility Verification Program, visit the Texas Department of Insurance Web Resource Page at www.tdi.state.tx.us/auto/frvp.html. For information about obtaining auto liability insurance, contact the department at 800-252-3439 or visit the agency Web site at www.tdi.state.tx.us/auto/index.html.

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R.A. Dyer reports from the Austin bureau, 512-476-4294 rdyer@star-telegram.com

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Copyright (c) 2007, Fort Worth Star-Telegram, Texas

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