Many Texans lacking auto insurance

AUSTIN — One in four drivers stopped by state troopers in Austin and Travis County for traffic violations this summer has been uninsured, and the percentage may be even higher in other parts of the state, an insurance industry spokesman said Monday.

"The numbers show that Texas has an even larger number of uninsured drivers than we had realized," said Mark Hanna, spokesman for the Insurance Council of Texas, which has been monitoring Texas' new auto insurance verification program.

"Troopers tell us that some areas of the state may have more than half of their drivers uninsured, and that's scary news for everyone else on our roadways," he added.

Texas law requires every driver to carry liability insurance, and the minimum amount required was increased this spring for the first time in 22 years.

Hanna said he didn't think the higher requirement was a factor in the lack of coverage because the effect on premiums was "minimal."

But 25.5 percent of 5,012 drivers stopped by Texas Department of Public Safety officers in Travis County and small portions of nearby Williamson and Hays counties since June 2 have lacked insurance, he said.

DPS spokeswoman Tela Mange said the number of insured drivers has "always been a moving target."

"We always thought it was somewhere between 20 and 25 percent," she said, based on information provided by drivers in accidents. But this is the first verification program of its kind in Texas.

Travis County was selected for a 60-day pilot project testing the new TexasSure program, which allows police via computer to verify coverage status when they stop a motorist.

A $7 million contract with HDI solutions Inc., an Alabama company that developed the database of insurance customers and drivers' license records, is funded by a portion of the vehicle registration fee.

All uninsured drivers stopped by troopers during this testing phase, which will end in a few more days, have been ticketed. Drivers who said they were insured but weren't carrying proof of insurance weren't issued citations if troopers, using the new technology, validated their insurance coverage.

"The program has worked the way it was supposed to," said DPS Lt. Louis Sanchez.

After the pilot project has been completed, DPS will issue an evaluation report. Eventually, the program is designed to be available for use by police statewide, although it won't be mandatory.

The new minimum requirements for auto liability insurance in Texas are $25,000 of coverage for each injured person, up to a total of $50,000 per accident, and $25,000 for property damage.

The previous minimum requirements were $20,000/$40,000/$15,000.

The new requirements were expected to increase the cost of liability coverage by 4 percent to 6 percent, although liability insurance is only part of the auto coverage for many drivers.

Someone driving without liability insurance can be fined as much as $350 for a first offense and as much as $1,000 for subsequent offenses.

Auto insurer Progressive offers discounts to motorists who permit monitoring of driving habits

TRENTON, N.J. (AP) _ A high-tech monitoring device makes it possible to reduce insurance premiums for drivers who avoid jackrabbit starts and slam-on-the-brakes stops, an insurance company says.

The catch? Bad drivers who take a chance on the program may wind up paying a surcharge instead.

Auto insurer Progressive Corp. has begun offering its drivers the chance to cut their costs based on how they actually drive, not only on their age, credit score and number of tickets or accidents on their record.

The monitoring device — sort of like a black box for cars — tells Progressive what time people drive, how many miles they've driven, how fast they accelerate and how often they hit the brakes. It does not track where people go.

Under Progressive's program, customers can earn a first-term discount of up to 10 percent just for signing up. When they renew their policy, their rate could decrease by up to 60 percent based on their driving habits. But it could also increase by up to 9 percent.

Richard Hutchinson, a Progressive general manager, said the program is designed for drivers who are consistent and safe.

"We want people to know that the program is not right for everyone," Hutchinson said.

"It's for people who drive at low-risk times of day and who keep alert for others on the road," he said. "They don't make fast lane changes or follow too closely behind other drivers so they don't have to overreact or slam on the brakes."

Progressive began the program in Alabama in late June. It's also been made available in Minnesota, Oregon and Michigan. A national rollout of the program will continue through 2009.

It starts in New Jersey on Aug. 8. The company will be the first to offer such a program in the Garden State, whose motorists have the highest auto insurance rates in the nation at an average of $1,184 per vehicle.

Other companies also recently began offering similar options.

GMAC Insurance and OnStar vehicle services last year started a new program that allows motorists to earn an extra discount based on the miles they drive.

"The consumer is really being given an opportunity to potentially reduce their auto insurance premium in exchange for giving their auto insurer access to information that currently isn't available to them," said Michael Barry, a vice president at the Insurance Information Institute.

The concept has been utilized elsewhere, too. After conducting a pilot scheme beginning in 2004, Norwich Union launched a pay-as-you-drive insurance program in 2006 in Great Britain.

Several insurers in recent years have offered monitoring of a particularly vulnerable population of drivers — teenagers. Under American Family Insurance Co.'s program, for example, a camera records audio and video images of the road and the teen driver when motion sensors detect swerving, hard braking, sudden acceleration or a collision.

There's an extra benefit to monitored driving programs — they help cut traffic congestion and pollution, according to the Environmental Defense Fund.

But Charles Samuelson, executive director of the American Civil Liberties Union of Minnesota, told The Star Ledger of Newark for Monday's editions that the group has worries about privacy.

"We see this as kind of a creeping abduction of people's data," he said. "Basically, once they collect that data, it belongs to the insurance company. That's a big problem."

Progressive spokeswoman Tara Chiarell disagreed, saying the customer owns the data and Progressive doesn't sell it or share it. The company uses it only for claims purposes. She also said Progressive has never been subpoenaed by a court to submit pay-as-you-drive data.

Customers can access their data on a secure, password-protected Web site, which allows them to get an up-to-date view of their driving habits and how those habits are affecting their rate, she said.

AAA Mid-Atlantic spokesman David Weinstein said if a link between electronic monitoring and accident probability becomes clear, they would like to see all drivers' insurance premiums based on that information, "not just select drivers who grant their permission."


On the Net:

Progressive Corp. http://www.progressive.com/