Driving a vehicle is a necessity in many countries, but you’ll also need a license if you’re an avid roadtripper and love to explore the open road.
The United States is one of the best roadtripping countries in the world, with epic drives like the Pacific Coast Highway, Route 66, and the Blue Ridge Mountains.
But due to cars becoming more affordable, and more and more people learning to drive, there has been a steep and steady incline in the number of cars on US roads.
On average, there are over 6 million car accidents in the US. And there has been a rise of 18% in the number of deaths due to car accidents in 2021. So the government has made insurance mandatory in almost every state.
This article will look at another law that was passed recently called the Electronic Liability Insurance Verification Program, which has been made to ensure road safety and security throughout the country.
What Is The Electronic Liability Insurance Verification Program in the United States?
The Law of Liability
The astonishing number of road accidents in the US shows the necessity for a law. This is why in almost every state (49 to be exact), it is mandatory to have liability insurance to legally drive a car.
If found without driving, you can get your license suspended, and even possibly some jail time as well.
Liability insurance is also called third-party auto insurance and this policy is not for the policyholder.
Let’s say that you hit someone else’s car, or a person, or someone’s home. The damages and injury that would be caused to the other person due to your fault should be covered by you. But what if you don’t have that much money?
This is why everyone is mandated to carry liability insurance with a minimum coverage limit. This coverage limit is the maximum amount of money the insurance company would pay to the other person. This ensures the victim of the accident gets the money and you don’t have to sell everything to cover the damages.
But many times things are not that simple. Many people either ignore renewing their liability insurance policy or don’t bother getting one. This is because auto insurance policies are expensive, and sometimes people are just too lazy, even if it’s below average coverage which is very affordable and easy to get.
If someone gets in an accident and the person at fault does not have auto insurance, who is going to pay for it?
Sure the person at fault will face charges, but the victim will be in financial trouble if his/her policy is not enough. Here’s the reason for the Electronic Liability Insurance Verification Program.
What is Electronic Liability Insurance Verification Program
In a move to reduce the number of cars driving without liability insurance, the Electronic Liability Insurance Verification program was started in 2020 and is primarily focused in the state of Illinois, but spreading to every state with more and more states adopting this program.
As the name suggests, in this program, all the auto insurance companies have to prepare a detailed report of every new policy they sell.
This report would include the name of the policyholder, the vehicle registered on the name, and every other detail. This data will be stored in the Secretary’s systems.
Not just new policies, but the companies also have to send reports of expiring policies, canceled policies, etc. All this data is sent daily.
How it Works and Affects You
The database will get the details of the insurance policy and match it with the vehicle identification number to check whether you have valid liability insurance coverage.
While it is stated in the program that the checks would be done periodically every 2 years, they could be done anytime to check your policy’s validity.
If you are driving a car with expired liability insurance or with no liability insurance and the database shows that as well, you may/may not get a warning, depending on the state you live in.
Another check will be done after 30 days to verify your insurance and if the insurance is still missing, you might be looking at a hefty fine.
Depending on the state, you can get a fine, suspension of license, and even some more severe charges. For example:
- In California, if you get in an accident without insurance, you can get a fine ranging from $300 to $700 along with a mandatory one-year suspension of driving privileges and if the accident is severe, you could get your vehicle impounded.
- Prison sentence: While it is rare to be sent to prison for the first offense of driving without auto insurance, repeated offenses can easily get you behind the bars. You could be in there anywhere from two weeks to even one year (which has happened in Michigan)
- License suspension: One of the most common punishments for driving without auto insurance is getting your license suspended for either a few months or an entire year. This is also served with additional fines and charges, adding insult to injury.
- In New York, you could be looking at a fine of a whopping $1,500 and your license can get suspended for at least one year and up to three years.
The bottom line is that you do not want to drive your car without a proper liability insurance coverage and with the coming of the electronic liability insurance verification program, getting caught driving without liability insurance is easier, and costlier.