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Insurance law has little impact
Alabama tied for second in most uninsured motorists, study says

MOBILE (AP) — A national study suggests Alabama's mandatory auto insurance law has had little effect on the number of uninsured drivers on state roads since the Legislature enacted it in 1999.

The Insurance Research Council, a nonprofit study group funded by insurance providers, released the study showing 25 percent of Alabama drivers lacked insurance between 1999 and 2004.

That was unchanged from a 1998 state study of uninsured drivers, and tied California for the second-highest percentage of uninsured drivers in the 50 states. Mississippi ranked first, the Mobile Press-Register reported.

Insurance experts say the problem with the law is that people with relatively few assets to protect have no reason to buy insurance.

"I think mandatory liability insurance is a tax on the poor," said Carol Jordan, a professor of risk management and insurance at Troy University. "They don't really need it. They don't have assets to protect."

House Minority Leader Mike Hubbard, who sponsored the mandatory insurance legislation, said the law can work, but it needs more teeth.

"It's just a law enforcement issue at this point," Hubbard, R-Auburn, said.

Decatur Mayor Don Kyle and District 3 City Councilman Gary Hammon are pushing for tougher laws to deal with problems like driving without liability insurance. One proposal is to adopt a plan, such as was recently enacted in Athens, allowing police to tow vehicles of unlicensed drivers.

In Alabama, the state Department of Revenue is at the forefront of enforcement.

Each year, the department mails letters to a randomly selected sample of 5 percent of drivers in the state asking them to verify they have insurance. If the driver replies no or fails to respond to the survey, the department suspends the vehicle's registration.

The department mailed 142,303 questionnaires between Oct. 1 and June 30, and issued 74,031 registration suspensions to those who replied no or did not reply.

Revenue Department spokeswoman Carla Snellgrove stressed that those who were issued a suspension could have had insurance but simply did not respond to the survey.

The department does not break out the negative replies from the unreturned surveys, Snellgrove told the Press-Register.

Drivers must pay $100 to restore their registration, and $200 for a second offense.

More than 49,000 drivers statewide were convicted of driving without insurance, failing or refusing to show insurance or operating a vehicle with invalid registration between Oct. 1 and June 30, according to statistics from the Department of Public Safety and the Administrative Office of Courts. The numbers were compiled by the Department of Revenue.

While driving without valid registration does not necessarily mean that a person is driving without insurance, the department does suspend registrations of vehicles not covered by policies.

Drivers who violate the mandatory insurance law must pay a $500 fine for a first offense, and up to $1,000 for a second offense.

Local police across the state also write citations for insurance violations.

Bob Hunter, director of insurance for the Consumer Federation of America in Washington, D.C., said that poorer states like Alabama and Mississippi will have a greater percentage of uninsured drivers in part because those on the lower end of the income scale have less to protect, and more immediate financial needs.

"There's a tendency for people with assets to have insurance," he said. "For people without assets, it's a piece of paper that doesn't give them much."

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Information from: Press-Register, http://www.al.com/mobileregister

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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