Lawmaker wants to put the brakes on Ohio’s random auto insurance checks

More than 30 states maintain databases that allow authorities to immediately determine whether your car is insured — regardless of whether you show your auto insurance card to a police officer when you’re stopped.

But Ohio takes insurance verification to a whole new level.

Each week, the state’s insurance verification program sends 5,400 letters to random Ohio drivers asking them to mail back proof of their auto insurance. If you don’t have insurance or fail to respond within 90 days, your driver’s license is suspended for 90 days and you must pay a $125 reinstatement fee and court costs.

A random auto insurance verification program has put Ohio on the map.

This law has been on the books since 1994. On Jan. 11, 2011, Ohio state Rep. Matt Huffman introduced legislation that would eliminate the verification program, although drivers involved in accidents or pulled over for traffic violations still would have to provide proof of insurance.

Huffman, an attorney who is one of the highest-ranking members of the Ohio House, calls the random verification program “unfair.” In some instances, he says, it’s like “playing gotcha.” Huffman told InsuranceQuotes.com that the program snares about 500 uninsured drivers every week, but it’s not worth the $580,000 annual price tag.

“Of the 500 who are deemed non-compliant, there is a large group that have a variety of circumstances — they are on vacation, serving in Afghanistan, living with relatives, or they are people who have insurance but forgot to mail their proof back or didn’t open the mail,” Huffman says.

“And then you have people who, because of their financial circumstances, who can’t afford insurance and are not going to buy it, and catching them without insurance doesn’t mean they are going to buy it later. No one is out there saying, ‘I may get a letter, so I better go buy some insurance.’ This program is not changing people’s behaviors.”

Ohio House Insurance Committee Chairman Jay Hottinger told the Columbus Dispatch that he’s not ready to ditch the verification program without some sort of replacement.

Ohio state Rep. Matt Huffman is sponsoring legislation that would stop his state’s random auto insurance checks.

Joe Thesing, assistant vice president of state affairs at the National Association of Mutual Insurance Companies, told InsuranceQuotes.com he’s concerned about verification programs that rely on databases, as the information could be outdated when a verification check is run. Thesing also worries about privacy issues.

“We do not believe any verification program is a silver bullet in terms of reducing the rates of uninsured motorists,” Thesing told InsuranceQuotes.com.

Thesing does acknowledge that Ohio’s random verification program is as effective as any other insurance verification program in the country. Indiana is the only other state that randomly verifies auto insurance, according to Thesing.

Thesing says the Insurance Industry Committee on Motor Vehicle Administration is developing an online, real-time verification program that he believes will be more accurate than the current database programs used by more than 30 states, including Ohio.

Across the country, one in six drivers did not have auto insurance in 2009, according to the Insurance Research Council.

Small business owners feeling health insurance pinch

Forty-seven percent of small business owners that provide health insurance to their employees said they may discontinue coverage because costs are too high, according to a Discover Small Business Watch survey conducted Jan. 10-12.

In addition, 55 percent of small business owners favored repeal of the health care reform law. On Jan. 20, 2011, the Republican-controlled U.S. House voted to repeal the law. However, the vote is considered largely symbolic, as the odds of repeal being endorsed by the Democrat-controlled U.S. Senate are very slim.

The survey was based on a national sampling of 750 small business owners. It was conducted by Rasmussen Reports, an independent survey research firm.

According to the survey, 53 percent of small business owners found it “very difficult” to obtain affordable health insurance for themselves and their employees, and 46 percent believed the federal health care reform law would hurt their businesses.

“Small business owners are suffering from rising health care costs and, according to the survey, most don’t believe the current law is the solution,” says Ryan Scully, director of Discover’s small business card.

Website takes temperature of cities’ health insurance coverage

When it comes to health insurance, is your city healthy or sick?

The Daily Beast has crunched health care data from the U.S. Census Bureau to come up with a list of the 25 most and 25 least insured cities. The website compared four factors for each metro area in the country: percentage of the total population with health care, percentage of people age 18 and under with health care, percentage of people 65 and older with health care, and percentage of disabled people with health care.

Here’s a look at the five “most insured” cities:

1. Springfield, Mass.
2. Worcester, Mass.
3. Boston
4. Madison, Wis.
5. Honolulu

And here’s a look at the five “least insured” cities:

1. Dallas
2. Houston
3. Miami
4. Las Vegas
5. Austin, Texas

–Kevin Lyons