I’m a pretty good test-taker. I hate tests, but I excel at passing them. This happens to be a good thing, because we insurance agents have to take 24 hours of continuing ed every two years. Some day I might write a column to whine about government involvement in my professional status, but not today.
One continuing education requirement is 1 credit hour of Montana law. There was one thing of particular interest in this course, and this is what I want to discuss. I thought I kept my finger on the pulse of my industry rather well, but there was a change to Montana insurance law I didn’t know about.
The 2009 legislature mandated the installation of an Online Motor Vehicle Liability Insurance Verification System, the purpose of which is to be able to electronically verify the insured status of vehicles. I wondered why I had missed this, so I googled “61-6-157,” which is the actual reference for the law. The only hits I received were State of Montana Websites. It didn’t make the news at all.
This law and its related laws require insurance carriers to electronically provide insurance data to the State, commencing July 2011. Law enforcement will have real-time access to the insurance status of drivers. According to 61-6-309, “…a peace officer or authorized employee of a law enforcement agency may, during the course of a traffic stop or accident investigation, access the verification system provided under 61-6-157 to verify whether a motor vehicle is covered by a valid motor vehicle liability policy…”
You know, this sounds just like the Arizona illegal immigration law. So “peace officers” will already know if you have liability coverage when they stop you. Since the online system is funded by fines and penalties collected from violators, there appears to be a real incentive to pull over people to ascertain their insured status. Where is the ACLU when you need them?
I’m in a bit of a quandary, however. On one hand I have a financial interest in writing car insurance. On the other, I have to consider how the mandatory insurance law is interpreted by my libertarian leanings. I don’t like laws that force otherwise law-abiding citizens to purchase something.
Some have tried to draw a parallel with the mandatory purchase of health insurance under Obamacare, but it’s not the same. The purchase of liability insurance is mandated by individual states, not the feds. Liability insurance protects others, not you. And if you don’t drive the law doesn’t apply to you, whereas Obamacare is only escapable via the actions of the death panel.
So the State, in essence, is forcing us to be “responsible” by buying liability insurance, yet there is something like a 40% non compliance rate. Further, the minimum liability requirement is only $25,000 per person, $50,000 per accident bodily injury to others, and $10,000 per accident property damage to others. Or you can purchase an indemnity bond with similar limits. These are clearly token requirements, and they are exceeded in accidents on a regular basis.
I suspect the legislation is intended to increase compliance, or perhaps, to increase revenue. It certainly increases state control over citizens. Admittedly, the financial consequences of an accident are potentially quite substantial, but we need to note that there is no requirement for citizens to purchase liability insurance for carelessly leaving a rake lying around, wrong side up. In fact, aside from automotive liability there is no other liability purchase mandate I can think of.
For better or worse, I tend to err on the side of less government control in peoples’ lives. In my idea of a perfect world, individuals, not society, would be responsible for their choices.
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