A bill, recently introduced in the NC House of
Representatives by Representative George Cleveland, referred to as house bill
602, proposes to confiscate uninsured vehicles operating on NC highways.
Cleveland is frustrated with the number of uninsured drivers on our highways
and wants to step up the costs of noncompliance to get drivers’ attention. If passed into law, then these rules would take
effect December 1 2013.
In NC car owners cannot renew their license plates without
first proving insurance is in place on the car associated with that tag. However, once past this hurdle, some
insurance policies are later cancelled while the driver continues to operate
that vehicle on the highways. The NC
State Highway Patrol issued 24,436 citations last year to drivers without
insurance. Some estimates put the number
of uninsured drivers on our highways as high as 15% of the total of all
vehicles on the road.
As an aside, when I first became an insurance agent in the
early 1980’s, uninsured motorists insurance coverage cost the average driver
about $3 per year per car. Now, that
number has skyrocketed to nearly $150 per vehicle. Part of this explosive increase in costs has
been related to the introduction in the mid 1980’s of underinsured motorists
coverage, but there is no doubt that the costs of uninsured drivers in our
state is something that everyone who buys insurance here has to bear.
The bill says that the confiscated vehicle will be placed
under the possession of the sheriff of the county in which the violation
occurred. It goes on further to state
that the sheriff shall restore the motor vehicle to the owner, only after proof
of insurance is obtained. In addition,
this bill would require the owner to pay the sheriff for costs actually
incurred by the sheriff towing, processing, and storing the vehicle. There is no mention of limitations on these
fees and expenses so we could see widely differing costs for uninsured
motorists from one county to the next.
One other area of consideration in this bill deals with the
rights of the lienholders to a confiscated vehicle. After all, they actually hold title to the
car until the loan is paid off. Section
3 says that the lienholder may petition the court to reclaim the vehicle for
sale to satisfy the lien. The allowance
of this reclamation is up to the discretion of the court however and if the
vehicle is returned to the lienholder then that party has to return to the
state any proceeds of the sale over and above the balance remaining on the loan
on that vehicle.
This bill is a drastic measure and may seem a bit heavy
handed but there are some additional provisions in the bill that will soften the
blow for some violators. There are
exceptions that can be made for technical errors that may have led to a lapse
in insurance coverage. Also, there is a
grace period that allows the driver to obtain insurance in order to avoid the
vehicle being sold by the state though during that time they will not have
access to their vehicle. I think it is
clear that the state of North Carolina would rather not get into the used car or
car auction business so they will hope that most people will purchase insurance
right away to get their car out of the impound lot. But I think it is a useful consideration that
a violator that has no insurance is not allowed to just drive off from the
traffic stop and endanger others with no means of paying for the accident that
he or she may cause.
You have to believe that if the bill does become law, and if
its successfully force more uninsured drivers to purchase insurance on their
vehicles, then over time the rest of us will see reduced uninsured motorists
insurance rates. And that is only fair.
At Clinard
Insurance Group, located in Winston Salem, NC, we help thousands of
families each year with their NC
auto insurance. We would love to
help answer any questions you may have about this or your home
insurance. We can also help you with
your life
insurance and business
insurance, so feel free to give us a call today at 877-687-7557.
