Minnesota has just joined the 21th century in terms of enforcing insurance requirements for drivers, argue brokers, applauding a new law coming into force.
Starting January 1, says DPS spokesman Bruce Gordon, drivers will be required to show proof of insurance – including details -- in order to register a vehicle, renew tags or transfer ownership.
That requirement mirrors those in place across most states in the Midwest and eschews the honour system that has helped to perpetuate the problem of uninsured drivers.
Brokers have led lobbying efforts to get the legislature to make the legal change, arguing the absence of such a law has only complicated the accident claims process for Minnesotans, including those with the mandated coverage.
Analysis from other markets suggests that brokers could see as much as a 5-10% increase in auto coverage renewals directly tied to the new law.
Still, Minnesota isn’t alone in tackling the problem.
Fewer Americans are driving without auto insurance, a report from the Insurance Research Council, released this year.
In its “Uninsured Motorists” study, the IRC found that the number of uninsured motorists peaked in 2009 at 29.9%, and has been declining moderately ever since. In 2012, just 29.7 million were driving without insurance.
Despite the decline in uninsured motorists, however, the cost to insurers has increased 75% over the past 10 years—roughly $14 per insured individual in 2012.
