Friday, February 13, 2009

The folly of impouding cars for no insurance

Dallas and Carrollton are now impounding cars of drivers with no insurance when they're pulled over at traffic stops - that's about one in four cars on Texas roads. Meanwhile, more than 200 departments statewide are participating in a traffic warrant roundup aimed at generating revenue. More than 10% of Texas drivers have outstanding arrest warrants for traffic fines, many of them for no insurance (which carries with it the hefty, ironically named "driver responsiblity fee").

It really makes you wonder whether there's enough jail space for all the scofflaws or enough impound lot space for all the cars. On the question of vehicles with no insurance, I've said before:
My own preferred solution to the crisis of uninsured drivers is as simple as it is unlikely to pass in Texas anytime soon: Use the gas tax to implement pay at the pump insurance for minimum liability so that every driver becomes automatically covered via no-fault insurance on terms more closely regulated by the state. As an added bonus, since companies would all be paid the same for every driver, they would be forced to compete on quality of service instead of striated pricing schemes.
Lately I've been noticing insurance companies beginning to avoid using credit scores to rate drivers and, in some cases, shifting to a straight up "pay by the mile" insurance premium. That's essentially similar to a pay at the pump scheme, except with pay at the pump there would be no option to not carry minimum liability coverage.

I consider the use of law enforcement to subsidize/maximize insurance company profits unnecessary and untoward, whereas pay at the pump would solve the chronic problem of uninsured drivers overnight, reduce rates by pooling risk more comprehensively, and free up police for other, more important duties. Sure, the threat of impoundment will make some people pay, no doubt, but only those who can afford it. In an economic downturn with new layoffs being announced every day, larding extra punishments on the poor seems like a a particularly untenable approach.


TxBluesMan said...

I don't have any problem at all with those with no insurance getting their cars impounded. Over the years, I have been victimized by two non-insured drivers, and had I not carried uninsured motorist coverage, I would have been stuck with two totaled cars.

You should take a look at Steve Blow's column in the Dallas News. It shows how well the program is working, and noted that the cars impounded for no insurance were being claimed at a higher rate than cars impounded for other reasons.

We don't need a socialized liability insurance program, we need people to be responsible. If they are going to drive, then they need insurance.

Hopefully, Steve's column answered your question on pound space - there is plenty of space, and it appears that 12,000 drivers in Dallas that didn't have insurance before will now have it.

You should applaud Dallas and Carrollton taking the action that they are and ask why other cities aren't doing the same.

Gritsforbreakfast said...

When the rate of uninsured drivers is 25%, Bluesman, it matters little if "the cars impounded for no insurance were being claimed at a higher rate." I'm sure that's true. But the 12,000 cars per year Blow predicts they'll tow are a tiny fraction of the total uninsured drivers. It won't solve the problem, it's just another profiteering scheme by government.

Also, the state requiring us to purchase liability coverage IS "socialized liability insurance," we just pay for it through policing costs and higher rates.

Gritsforbreakfast said...

BTW, Bluesy, don't you wish when you had your wrecks with uninsured drivers that we'd had pay at the pump insurance so they'd be automatically covered? Why wouldn't that have been a better outcome?

TxBluesMan said...

Who provides the insurance from pay at the pump? The government?

I prefer the freedom to choose my provider on the free market. Liability insurance is not a proper function of government, nor, for that matter is socialized health coverage, etc. Unlike your statement, it is not currently 'socialized' due merely to a requirement to carry the coverage.

So, no, it would not have been a better outcome, as it would be yet another step towards socialism.

Gritsforbreakfast said...

If liability insurance is not a "proper function of government," then government shouldn't require it.

The idea behind insurance is "pooling risk." The current method has resulted in 25% of drivers not being in the pool, which drives up the cost for everyone else. They can never impound enough cars to make a serious dent in that number.

Regarding your own accidents with uninsured drivers, you say pay at the pump "would not have been a better outcome, as it would be yet another step towards socialism," but that's an ideological argument. From your perspective as a DRIVER, surely you agree it would have been better if the drivers who hit you had been automatically insured?

Do you honestly believe this policy will reduce the percentage of uninsured drivers to zero? Because I can GUARANTEE pay at the pump would.

Anonymous said...

My two cents worth. As a high mileage driver, 150 miles a day, with a good driving record, Pay by the mile would penalize me. Miles alone do not increase the risk of accidents. Look at truck drivers with high mileage and excellant records. Pay by the mile would just increase insurance company profits. The pay at the pump option for uninsured motorists might actually decrease my premium however.

Anonymous said...

I believe if contested, including on appeal, these city ordinances would be found to be contrary to state law. And if I understand correctly, city ordinances can be written to reflect state law but cannot be written in a manner that supercedes state law.

In my opinion, the language in these ordinances creates two penalties; fine and impoundment of the vehicle. Under the Transportation Code for first offenses, FAILURE TO MAINTAIN MOTOR VEHICLE LIABILITY INSURANCE OR OTHERWISE ESTABLISH FINANCIAL RESPONSIBILITY, there is no provision for impounding the vehicle, only a fine.

Impoundment of a vehicle is authorized under conviction for subsequent offenses, which are B misdemeanors, and must be ordered by the court.

Anonymous said...

"Another step toward socialism." Really; really? That train has already come and left the station; or hasn't Rush informed you of that fact yet?

Anonymous said...

The relevant language from the transportation code is "FAILURE TO MAINTAIN MOTOR VEHICLE LIABILITY INSURANCE OR OTHERWISE ESTABLISH FINANCIAL RESPONSIBILITY". Everyone keeps forgetting the second part of that phrase. There is no requirement to carry motor vehicle insurance in Texas as long as you are financially responsible. How you establish that on the side of the road to the satisfaction of a police officer determined to have your car towed is, of course, another matter.

Anonymous said...

Since the lege isn't going to touch the issue any time soon or ever, for that matter, then let's live in reality.

Dreaming of ideas to solve the problem, although sensible, does not negate the fact that the law exists and needs to be enforced.

In the real world, you have to have insurance to drive a vehicle and if you don't, you pay the price. Whining and complaining about it doesn't help the uninsured poor unemployed, waiting for Obama's check guy any more than it does the oil barron, Rush listening, Bentley driving guy he just plowed in to.

Soronel Haetir said...

I would go beyond impoundment for a second offense, crush the car. Doesn't belong to you? Tough, crush it.

Driving is not a right, as much as people would like it to be.

Anonymous said...

Pay at the pump liability insurance is an extraordinarily good idea, Mr. Henson.

Anonymous said...

Pay at the pump is a good idea. It would reduce cost and everyone would have coverage.

Anyone that wanted extra coverage or service could obtain it on the open market.

As far as socialization is concerned, get over it, we're already socialized by our mothers and the internet. The government has to take a back seat these days.

Anonymous said...

As long as they're not setting up insured driver checkpoints, and these people are being discovered as being uninsured while pulled over for something else, I see no problem with it. If you don't have insurance, you don't need to be driving.

And if you disagree with cops incidentally improving insurance company profits, why don't you disagree with the controller's office or weights and measures, or whomever is dealing with taxing at the pump, doing the same?

I also think that pay at the pump does not take risk into account. I haven't had a wreck or ticket in years, but I pay the same as everyone else? When I fill up my gas can for my lawnmower, am I insuring my lawnmower?

Unknown said...

I'm frankly amazed at how much faith people have in the computerized system that supposedly lets the police officer know whether your insurance is currently in force. One data entry glitch, and you're walking home.

I'm a computer programmer. You couldn't pay me enough to trust a system like this with such a critical law-and-order function. In fact, the Windows operating system (which the machines behind this boondoggle are likely running) has a License Agreement which says, in part, that it can not be used in areas where public safety could be impacted. I think this counts -- and you will too, when some distant computer returns a "0" instead of a "1" and the friendly officer calls the tow truck.

Unfortunately, I work in Carrollton and drive through Dallas, so it's a good thing I know how to ride the bus!

Anonymous said...

I found this little lovely from some asshat in the Texas Legislature. It is now a misdemeanor to enter into an agreement to pay your surcharge and then back out. Now they will tack on more money to what you already owe them. I wanted to bring this up to you guys and let you know what is coming down the line.

81R7496 JD-D

By: Jackson H.B. No. 1248


relating to the criminal consequences of a failure to pay the
[Previous Hit] surcharge [Next Hit] assessed on a person's driver's license under the driver
responsibility program.
SECTION 1. Section 708.152, Transportation Code, is amended
by adding Subsection (c) to read as follows:
(c) A person commits an offense if the person fails to pay or
enter into an installment payment agreement with the department to
pay the amount of a [Previous Hit] surcharge [Next Hit] on the person's license. Each failure
to pay or enter into an agreement to pay the amount of a [Previous Hit] surcharge [Next Hit] is
a separate offense. An offense under this subsection is a
misdemeanor punishable by a fine not to exceed $250.
SECTION 2. The change in law made by this Act applies only
to a [Previous Hit] surcharge [Next Hit] that is assessed by the Texas Department of Public
Safety on a person's driver's license on or after the effective date
of this Act. A [Previous Hit] surcharge [Next Hit] that was assessed on a person's driver's
license before the effective date of this Act is covered by the law
in effect when the Texas Department of Public Safety assessed the
[Previous Hit] surcharge [Next Hit] , and the former law is continued in effect for that
SECTION 3. This Act takes effect September 1, 2009.

Anonymous said...

To 8:00pm

I thought the surcharge was an administrative fee and not a criminal offense.

Imagine creating a criminal offense to collect a civil or administrative fee.

PirateFriedman said...

These people who drive without insurance are deadbeats.

Gritsforbreakfast said...

"people who drive without insurance are deadbeats"

You'd really apply that term to one in four drivers? That seems silly, at that point, to claim it's solely a moral failing.

PirateFriedman said...

Grits, thanks for the response.

YES I would say that mere numbers do not absolve a group of moral responsibility. If 80% of the country was made of thieves, they would still be deadbeats to me.

I do believe that those who drive without insurance respond to incentives. If we hit em hard enough, they will change their behavior and take the bus. Criminals may not be the brightest bulbs on the shelf, but if dogs respond to incentives, they will too.

Of course, I also have a solution which will not be passed any time soon: privatize the roads. Let the owners of the roads decide who can and can't drive on them.

Anonymous said...

I agree with impounding the vehicles. the reason being and i am going to say upfront I am a police officer is that there is a risk of liability if the driver is released with the vehicle and we had a chance to stop them, its no different than sending a drunk down the road as far as liability is concerned it would come back on the officer if we let them go down the road and something goes wrong What is not being mentioned is that a conviction for failure to maintain financial responsability (fmfr) also results in suspension of your drivers license. The other problem is that so many people will get insurance in a one month policy just to get tags or inspection then let it lapse until next time I really think the insurance companies need some changes in the way they operate. pay at the pump insurance just how would that work?

Boyd Petrie said...

I was grateful for having auto insurance when my Jeep was stolen and totaled during a high speed pursuit. Obviously I wasn't getting money from the criminals who stole my car.

However, now the shoe is on the other foot, and I feel like the criminal. I had let my insurance lapse (lost my job, couldn't afford insurance and rent), and just drove more carefully. However, since driving without insurance is a violation of law, I was pulled over and cited.

Now, I don't know where I was going to come up with money for this new $400 ticket (I couldn't afford insurance, what makes them think I could afford a ticket??). Now I have a job, but my citation has now turned into a bench warrant. Strange how things happen.

What's crazy is that I've never been in an auto accident (only one accident on record when someone slammed into my parked car and drove away and never apprehended). In addition, I had my car's catalytic converter stolen while it was parked (again!), so while I was saving up money to pay for insurance and the ticket, I had to use much of that money to get it fixed. Again, the criminals were not caught.

Seems like it pays more to be a criminal than it does to try to be a responsible person. Not only do I have to pay for damages done to my vehicle which insurance wouldn't cover, I have to pay over $1500 in legal fines. And that's not considering the bench warrant which I will need to find time and money to pay for.

*sigh* Just thought I'd throw my story out there.