Saturday, July 17, 2010

Draconian solutions fail to lower Dallas' uninsured rate

One reason I'm glad to see the proposed new rules for the Driver Responsibility Program is I've become utterly sick of phony, disingenuous non-solutions like the DRP being proposed for the problem of uninsured drivers. The issue has been around forever, voters are frustrated and edgy about it and because everyone drives, everyone's got a strong opinion.

Even so, actual real-world solutions remain elusive. The most draconian possible tactics have been tried and failed, often making the situation worse. The DRP attached huge, multi-year civil penalties to the violation which knocked 1.2 million people off the driver rolls, making them ineligible to even buy insurance. The state has created a massive, Big-Brotherish database of every active insurance policy, which has served only to document the problem, not reduce it. In Dallas and other Metroplex jurisdictions, drivers without insurance have their cars impounded. Name a radical, enforcement-only approach and it's been tried, usually in many places.

Terrence Stutz at the Dallas News reports that after years worth of git-tuff policies in Big D, 25% of Dallas-area drivers still have no auto insurance ("TexasSure program finds about 25% of vehicles uninsured in Dallas County," July 17). He reports:
It's a slight improvement over the last six months, but about 25 percent of all vehicles in Dallas County – 429,478 cars and trucks – remain uninsured, a new analysis by the state Department of Insurance shows.

Dallas County continues to have the highest percentage of uninsured drivers of the six largest urban counties in Texas. In Tarrant County, about 21 percent of vehicles had no insurance coverage.

The figures, pulled from the database of the TexasSure vehicle insurance verification program, also indicated that 3.7 million vehicles statewide – 21.6 percent of the total – lack basic liability coverage, a violation of a state law requiring insurance.

Though the numbers are high, they're an improvement from December 2009, when nearly 26 percent of vehicles in Dallas County and 22.2 percent statewide had no insurance coverage.

Department officials credited the TexasSure program with helping to reduce the percentages. 
It's absurd for anybody to be claiming credit for moving from 26-25% uninsured drivers - that's hardly a statistical blip!

Predictably, the comment section to Stutz's article quickly filled with calls for even more draconian measures (and also many calls for impounding vehicles, apparently not realizing Dallas already does that). But punishment alone cannot solve this problem. I replied in the comments:
The plain fact many commenters here ignore is that when 25% of drivers are uninsured, it would shut down the economy overnight to seize all their cars or otherwise stop them from driving. Sometimes reality must intervene during these absurd conversations.

Speaking of which, why do Republicans hate Obama's healthcare plan for making us buy insurance but don't mind the IDENTICAL, failed scheme for drivers? If government forces you to have insurance, we should just pay at the pump through gas taxes and be done with it so everyone must pay. A requirement in criminal law to buy private insurance has been a complete failure, just as it will be when implemented for healthcare.
I discussed during the 2008 election season why our experience with auto insurance made me agree with what was then (but not now) Barack Obama's criticism of Hillary Clinton's mandatory health insurance plan. She suggested requiring everyone to buy insurance along the Mitt Romney/Massachusetts model, but in Texas requiring everyone to buy auto insurance - and enforcing the requirement with criminal penalties, no less - has resulted in nearly one in four drivers uninsured. That's a failed policy.

Of course, once Obama got into office, Clinton's plan ended up being essentially what he passed! And in its wake, he was labeled every kind of Socialist, Communist, Big Government Liberal, you name it for requiring everyone to purchase health insurance. So somebody please explain to me: Why isn't it also "socialist" to require drivers to purchase private auto insurance? What's the difference?

Since no matter what you suggest these days it seems like one is labeled a "Socialist," let me offer up an actually socialist solution, but one that's at this point the only viable option if we honestly want every driver insured: Drivers should pay at the pump through the gas tax for minimum liability coverage and essentially "nationalize" that market. Doing so would immediately cover every driver and eliminate the need for each driver to have a separate insurance payment for minimum liability. Insurance companies could still deliver liability insurance just like some today participate in Medicare or Medicaid. And they could still sell extra coverage for one's own vehicle, etc., so there's a significant auto insurance market beyond selling minimum liability. But if it's going to be a requirement to purchase insurance - to the point where criminal penalties and property seizure result if you choose not to enter into a commercial transaction with a private insurer - it'd be a lot cheaper and easier for everyone to just make it mandatory and universal.

There, I said it. Let the red-baiting begin!

Confusion over Amnesty rules?
Incidentally, at the end of his story Stutz mentioned the new Driver Responsibility rules, but I think he misstated what's going on with the Amnesty program. He wrote:
Public safety commissioners outlined two changes they hope will improve compliance, including a reduction in the surcharge that must be paid by indigent people – those making less than $14,000 a year – to 10 percent of the total, not to exceed $250.

The other is an amnesty provision for those who have failed to make payments in the past. It will allow them to resume surcharge payments and have their driver's license reinstated if they pay 10 percent of what is owed, not to exceed $250. They still must pay the remainder of their surcharges to stay in compliance.
The way I read the Amnesty provisions, that's incorrect. As I understand it, "Each applicant eligible for amnesty will be required to pay 10% of the total amount of surcharges assessed, not to exceed $250." Then, "Once the department determines the applicant is eligible for amnesty, the department will rescind the suspension of driving privileges for each applicant that receives amnesty." After that, "Payment of the reduced amount must be received by the end of the amnesty period," and "If prior payment(s) exceeds the reduced payment, the driver will not be required to make a payment." However, "Any prior payments that exceed the reduced payment will not be processed for a refund." If you still had to pay the full amount, it wouldn't be much of an "amnesty," would it?

I'm not a lawyer but if there's anything suggesting those receiving amnesty "still must pay the remainder of their surcharges" beyond the $250, I'm not seeing it in the proposed rules.

The goal of the amnesty program is to reduce the massive backlog of folks who didn't pay and thus are for the most part now driving unlicensed and uninsured. That's particularly important among drunk drivers, who have the highest DRP surcharges but are also the folks you most want to make sure have auto insurance. There comes a point in the insurance debate when one must decide whether it's preferable to solve the problem or whether it's enough to punish and castigate everyone who fails to comply with the government's last failed solution(s). I'm pretty much sick of the latter approach.


Anonymous said...

Gas tax for liability insurance sounds great. Leave collision and comprehensive optional through private insurers. Even let the private insurers get in on the gas tax insurance through some kind of bidding scheme for contract if the state does not want to be in the ins. bidness.

charles in tulia

Anonymous said...

Well Grits, lesson learned is that you can't believe everything that's written or reported in the newspaper, hint - hint.


Anonymous said...

I agree. A gas tax for liability insurance and a beer tax to support the trauma centers. True socialism big brother government is mandating insurance, better to just add it on to the free market price of gas and beer and get rid of using the police power to make people pay.

Anonymous said...

I got hit from behind by a woman who had no insurance. Even though I live below the poverty line, I maintain my insurance. Why can't this lady, whose husband btw, was driving a Cadillac, keep insurance? I looked up her address on my GPS, her neighborhood is 3br, 2 bath, 2 car garage brick houses. I live in a hotel room. WTF? My only satisfaction comes from knowing she has that $1000 surcharge waiting on her, on top of the fine she has to pay. At first, I thought the DRP was bad, but now as I sit here wondering how much my insurance rates are going up, I kinda like it.

Gritsforbreakfast said...

7:56, I notice you've been adding that identical comment to strings on the DRP in other Grits posts for a couple of weeks now. Please stop and find something new to say. That's spamming.

Anonymous said...

Grits, a couple of quick comments:

1) The primary difference between mandating auto insurance and health insurance is twofold: 1) With auto insurance, if you do not drive or own a car, you are not required by law to maintain insurance. With health insurance, everyone is required to maintain coverage. Second, the direct risks of injuring someone else when driving a car are exponentially higher than not maintaining health insurance.

2) Your proposal re the gas tax once again abnegates personal responsibility. This seems to be a trend with ideas emanating from the left. Personally, I do not believe in mandating auto insurance. That said, the legal penalties if you cause significant financial/personal injury should be much, much, higher.

Anonymous said...

We need an amendment to the U.S. constitutional that prohibits the government from passing any law that requires a person to purchase any product or service from another.

Anonymous said...

from are right, Grits. I apologize for spamming. If you want to take out my comment, okay. I guess I'm sore because I had to borrow the money for my deductible to
get my vehicle fixed.

Gritsforbreakfast said...

9:43, no worries. The conversation just moves forward better if you don't repeat. When somebody is spamming I never know if the comments are even real or not. :)

9:31, the flu kills more people every year than drunk drivers, so you're dead wrong healthcare doesn't affect others. Also, doesn't it "abnegate personal responsibility" to mandate purchasing insurance, since if someone is personally responsible they'd get it without having to pass criminal laws? How can anyone who calls themselves "conservative" endorse a government mandate to enter into a private commercial contract? I don't get it. There's a lot of cognitive dissonance going on there.

BHorton2 said...

Brilliantly and succinctly said Charles in Tulia!

jdgalt said...

Speaking of which, why do Republicans hate Obama's healthcare plan for making us buy insurance but don't mind the IDENTICAL, failed scheme for drivers?

There is a good reason to require drivers to have insurance (or post bond): by driving, they impose risk on everyone else on the roads, which morally requires that they make themselves non-judgment-proof.

But people who go without health insurance do not similarly impose any risk on the rest of us. (The fact that emergency rooms are required to care for the uninsured does not change that fact, because the uninsured did not write that law. If it's costing too much, then let's repeal it, not complain about it to the people who have no alternative but to take advantage of it.)

But I agree with you that "Driver Responsibility Surcharges" are counterproductive as well as (in my layman's opinion) unconstitutional (both the "excessive fines" and ex-post-facto clauses come to mind, & I wonder if they've been tried?). Revoking drivers' licenses without good cause only forces people to drive without licenses, causing the whole licensing system to lose not only its reputation but its deterrent effect, and then where are we?

If Texas wants drivers to get insurance, let them revoke the registration of uninsured vehicles and start towing or Denver-booting those vehicles wherever found, with no exceptions for illegal aliens. This has worked in New York. (California has had this law for only two or three years, and doesn't enforce it on illegals, so I'm not sure how effective it is there.)

Gritsforbreakfast said...

JDG, in Dallas they both tow uninsured vehicles and don't renew their registration. The result: 25% STILL have no insurance. You're suggesting things that have been tried and failed. What then?

Even if emergency rooms didn't treat the indigent, as mentioned, flu kills more people than drunk drivers each year. People who fail to finish their antibiotic regimen may help spawn antibiotic resistant bugs. The idea that going without healthcare poses no risk to others is simply false - in pure dollar terms, not to mention human suffering, it causes MORE damage than uninsured motorists by a country mile.

Paul UK said...

Hello from this side of the pond, while in theory having minimum liability covered by a gas tax is a great idea. It falls short on one count, the totally inadequate levels of cover provided by the State minimum liability (I believe in Texas it is USD $25000)hardly enough to cover medical bills, let alone long term care for the seriously injured. If you want to be radical, may I suggest you look to my sisters new homeland New Zealand. New Zealand operates the accident compensation corporation which is a no fault scheme for all accidents and victims of crime, that includes motor accidents, injuries at the workplace, medical accidents, sports injuries and also can cover New Zealanders overseas. It is very well liked in New Zealand. First it speeds up claims process taking the stress out of the claims process. It is cheaper and avoids the adversarial process. Here is their website.

C. Maynard said...

It always does to think freshly about a contentious issue like auto insurance - but your embrace of gas tax insurance seems unaware of the following decisive (and dismissive)critique, published in 1998:
"Gas-Tax and Time-Period Insurance Methods Equally Flawed" by P. Butler. National Underwriter trade weekly, June 15, 1998, 1 page. #594 pdf.
You can find this paper at Scroll down to: List of Papers (Available here as downloadable pdf files and on request as paper copy reprints sent by postal mail)

Marilyn said...

I live in North Carolina and if I don't have insurance and an inspection, I don't get an updated sticker for my tag. That leaves me open for other things I can be stopped for with higher penalties.