The Woodward News

January 11, 2013

Missing car insurance costing state

Gary Engel
Woodward News

Woodward, Okla. — OKLAHOMA CITY - Oklahoma is losing more than $8 million in yearly premium taxes, according to the state insurance department.

The deficit, officials say, is created by drivers who fail to keep state-required minimum coverage for their vehicles.

Proof of insurance is required when renewing a driver's license or registration, but Oklahoma Insurance Department spokesperson Kelly Collins said some motorists have figured out a way to get around the requirement.

"They get a policy that's good for just a day, then cancel it," she said.

The fine for a first violation of the law is $250, which could affect premiums or provision of coverage for the individual in the future, she said.

Collins said the losses affect the state's general revenue fund - which often affects money for schools and social services among other areas. Those losses due to the lack of insurance are around $4.2 million.

The rest is a shortage to the Firefighter Pension Fund (34 percent or just more than $3 million), the Police Pension Fund (14 percent or about $1.3 million) and the Law Enforcement Pension Fund (5 percent, about $445,000).

Collins said the average cost of annual liability insurance for almost 564,000 Oklahoma vehicles is $70 and the tax on premiums is 2.25 percent.

The agency is conducting driver checkpoints across the state to monitor compliance with the regulations, she said, and is working on changes to the law, such as increased fines, as part of its 2013 legislative agenda.

Public service announcements are also being aired to increase awareness of the regulations and risk of violation.

The public can go online to ok.gov/oid/Consumers/Insurance_Basics/Auto.html to learn more about auto insurance and even shop for coverage, Collins said.

John D. Doak is the Oklahoma Insurance Commissioner.