Since oklahoma has a problem with uninsured motorists, and illegal immigrant motorists (according to the news), should we consider changing to a "No fault" state?
To sum it up, in a "no fault" state, you insure yourself. If someone hits you, your company pays. No worries about what the other guy does or doesn't have. Some studies to show rates are actually lower in no-fault states.
Any thoughts?
Wikipedia article (//%22http://en.wikipedia.org/wiki/No_fault_insurance%22)
I just wished people would realize that what is known as 'uninsured motorist' has nothing to do with whether or not the guy that hits you has insurance.
It's one of the biggest insurance rip-offs in my opinion.
quote:
Originally posted by sgrizzle
To sum it up, in a "no fault" state, you insure yourself. If someone hits you, your company pays. No worries about what the other guy does or doesn't have. Some studies to show rates are actually lower in no-fault states.
I think that could gain momentum, given the growing disgust and mistrust over insurers weaseling out of claims. Right now, mandatory insurance only means higher rates for a captive audience.
quote:
Originally posted by NellieBly
I just wished people would realize that what is known as 'uninsured motorist' has nothing to do with whether or not the guy that hits you has insurance.
It's one of the biggest insurance rip-offs in my opinion.
Care to explain? Becuase that's what i think/thought it was.
My personal feeling is that if someone doesn't have insurance, their car, damaged or not, should be sold, and the proceeds should go towards repairing your car. As it is, nothing seems to happen to them except maybe a fine for no insurance.
Some studies to show rates are actually lower in no-fault states.
I would be in favor of no-fault if this were the case. Otherwise, it really makes no difference. If the at-fault guy doesn't have insurance, your insurance pays (if you have the correct coverage).
I just wished people would realize that what is known as 'uninsured motorist' has nothing to do with whether or not the guy that hits you has insurance.
Absolutely correct. Uninsured motorist coverage has nothing to do with someone hitting you who doesn't have insurance. It should be called 'under-insured motorist' coverage. Uninsured motorist coverage ONLY kicks in when you have high medical bills and the other person's insurance maxes out. But, if you have health insurance coverage through your employer, it will usually kick in when the other guy's insurance maxes out.
A huge waste of money! My agent was very reluctant to let me drop it because "I'm required to have a certain percentage of clients with uninsured motorist." Okay, great. But not me.
I lived in Pennsylvania with it's no fault insurance and I was a passenger involved in a crash of a friend's car. Basically, I was an innocent bystander sitting in the passenger seat. When it was all over, I had about $25,000 in medical bills that went to my auto insurance company. The company promptly doubled my rates, claiming it was a 'normally scheduled increase.' I promptly dropped then and found another company with my old rates.
The problem with no fault is that everybody pays, regardless of who caused a crash.
The company promptly doubled my rates...
Oklahoma State Statutes prohibits insurance companies from upping your rates based on a collision that is not your fault. As to how to prove they upped your rates based on the collision that was not your fault as opposed to a normal rate increase, I don't know.
My CLU report showed two "not at fault" accidents on the same day. I was told my rates were going up because of the fact I had two incidents so close to one another.
To add insult to injury, not only did I not get hit twice, I didn't even leave my home that day.
Two items from the Oklahoma Insurance Department's website:
What is Uninsured Motorist Coverage and am I required to have it?
This coverage pays you, resident members of your family, and occupants of your car for personal injuries caused by an uninsured motorist, an underinsured motorist, or a hit and run driver. While you are not required by law to carry this coverage, companies are required to offer it with every policy. It does not pay for damages to your car. If an uninsured motorist damages your car, repairs would be paid for under your collision coverage. If you carry liability only, there would be no insurance coverage available to repair your car.
I was involved in an accident in which the other driver was at fault and had no liability insurance. Can my rates increase after I file a claim on my own auto policy?
No. Section 941 of the Oklahoma Insurance Code says that a company cannot assign driving record points, cancel, refuse to renew or increase the premium rate for any motor vehicle liability or collision insurance policy for the reason that the insured has been involved in a motor vehicle collision and was not at fault.
http://www.oid.state.ok.us/083101ConsumerAssistance/083101CA%20FAQs.htm#1
I was hit by an uninsured motorist and after they gave him a ticket the cop let him drive off. I was livid. If an uninsured motorist is involved in any accident, their car should be towed and stored until they have proof of insurance -- and not just a 30-day policy either.
I asked my state legislator if this could be something addressed by a new law and she thought it was a good idea. I need to email her and remind her.
No-fault is truly the way to go, but you have to be careful what bill of goods you are being sold. No state currently has a true no-fault law though Michigan is closest. At least 30-40% of insurance claims is swallowed up by lawyers. That is on top of what is paid out to doctors, etc... The insurance industry and lawyers do not want to see no-fault and they are going to fight it at every turn.
Fill'er up with no fault, please (//%22http://www.time.com/time/magazine/article/0,9171,957115-1,00.html%22)
If an uninsured motorist is involved in any accident, their car should be towed and stored until they have proof of insurance...
Be careful what you ask for. Police run into many people who just don't have their current proof in their car, but you can tell, based on the person and the type of car they drive, ....... that they indeed have insurance on their car, it's just the new proof is at home laying on the desk. You don't want it mandated that all these cars get towed. They still get ticketed, but the outcry from all these towed cars would make your proposal very short lived. The tow bill would be over $100 for a ticket that will get dismissed at no cost.
As it stands now, police will have your vehicle towed if they stop you and the tag is more than 90 days out of date. It has happened to several people I know. One friend had to borrow money from me as his total to get the car out was around $500 after he paid up his tag, the fine, and the bail for his car. It was laziness on his part and there was no excuse, but I bet he never lets his tag lapse again.
I think that is a screwed up sense of priorities. Yes, I can understand enforcing tax laws, but allowing some creep w/o insurance to drive off is just wrong. I think car impoundment and a database linked to insurance companies would be a great idea so OTC knows if someone went back and cancelled their insurance 30 days after buying their tag. Hell, all the insurance and tag records are on computers in the first place, how costly could it be to have some sort of an automatic cross-check system?
IOW- if someone cancels their insurance, it would flag on the OTC computer. I think they should pass a law that states if you have had more than a 10 day lapse on liability coverage in the last year, you cannot buy a tag for your car and you cannot renew your license. If you aren't willing to be a responsible car owner and driver, you don't drive.
1) Just to be clear, in a no-fault state you insurance pays and then goes after the other guy. So at the end of the day it essentially requires all insurance companies to issue ONLY COMPREHENSIVE policies. They are forced to cover any and all damages and you are forced to pay for such an extensive policy.
I dont want to pay for full coverage.
2) Also, discounts for good drivers go out the window. Since your insurance company has to pay anyway, they wont bother giving discounts. Since I have a clean driving record I like discounts.
3) Furthermore, if you are trying to get lawyers out of the picture this isnt going to help at all. You are just as likely to need a lawyer to get money from your own insurance company as you are to get money from some other insurance company. Not to mention the setup, by its very nature, requires the insurance companies to use more lawyers. When the insurance company pays out they will attempt to collect from the party actually at fault, which will require an attorney. Whereas, in the current situation the insurance company for the party at fault usually offers to pay without the need for an attorney (which you should carefully consider anyway).
Thus, more attorney's probably.
4) Finally, this is yet another erosion of personal responsibility in America. If you are a careless or just a poor driver, you should pay. Not me, you.
So if you want no fault insurance, you can go out and buy the policy right now. But dont force me to do so.
Michigan has "No-Fault" insurance and they had it since the mid-1970's. The rates are indeed higher, but Michigan does not have the all the illegal aliens driving that Oklahoma has. Texas cars insurance is very expensive due to the illegal aliens driving. The only way to solve the problem would be to enforce our border laws and start deporting illegals,--- Everytime an illegal becomes known in the system such as a cop stops a car with a busted tail light, the driver turns out to be illegal- Goodbye! He's gone, In time the accident rate will be whittled down. "No-fault" can let ya hang out to dry in a serious crash. it only helps the uninsured drivers and will be good for illegals I see nothing good about it for regular hard working citizens.
Twenty-four states now have variations of no-fault auto insurance, but fierce opposition by the insurance industry and the legal profession has rendered many of these laws ineffective.[8] Under the adversarial system of fault insurance, 55 percent of those seriously injured receive no compensation, and the average monetary loss is $76,341. However, a U.S. Department of Transportation study showed that they receive only an "average of $3,742, or 5 percent of their loss." By contrast, in Michigan under no-fault insurance, 260 claims for "catastrophic" medical costs (more than $25,000) were compensated an average of $108,000 each. Of these, 32 percent were single-vehicle accidents where there was no other driver to sue. Fifteen percent of the single-vehicle accidents were motorcycle accidents, which are usually catastrophic. Such accidents are, under current insurance coverage, usually uncompensated.[9]
[8] Tobias, Auto Insurance Alert, pp. 4, 54-61; Jeffrey O'Connell, The Lawsuit Lottery (New York: The Free Press/Macmillan Publishing Co., Inc., 1979), pp. 158-61.
[9] Jeffrey O'Connell, Lawsuit Lottery, (New York: The Free Press/Macmillan Publishing Co., 1979), pp. 157-175.
http://www.ied.info/books/www/insurance.html
quote:
Originally posted by cannon_fodder
1) Just to be clear, in a no-fault state you insurance pays and then goes after the other guy. So at the end of the day it essentially requires all insurance companies to issue ONLY COMPREHENSIVE policies. They are forced to cover any and all damages and you are forced to pay for such an extensive policy.
I dont want to pay for full coverage.
2) Also, discounts for good drivers go out the window. Since your insurance company has to pay anyway, they wont bother giving discounts. Since I have a clean driving record I like discounts.
3) Furthermore, if you are trying to get lawyers out of the picture this isnt going to help at all. You are just as likely to need a lawyer to get money from your own insurance company as you are to get money from some other insurance company. Not to mention the setup, by its very nature, requires the insurance companies to use more lawyers. When the insurance company pays out they will attempt to collect from the party actually at fault, which will require an attorney. Whereas, in the current situation the insurance company for the party at fault usually offers to pay without the need for an attorney (which you should carefully consider anyway).
Thus, more attorney's probably.
4) Finally, this is yet another erosion of personal responsibility in America. If you are a careless or just a poor driver, you should pay. Not me, you.
So if you want no fault insurance, you can go out and buy the policy right now. But dont force me to do so.
CF- good points, but as it stands right now, you ARE being forced to buy insurance- to protect others from your actions. You are a law-abiding citizen by buying it. There is no benefit to you for having liability insurance other than protecting your personal assets in a law suit, though if your assets out-strip your policy limits they will go after those as well.
Problem is, I'm sure a fair amount of those who don't bother to get or keep liability insurance don't because either they have a slew of moving violations and accidents on their record and they are either un-able or un-willing to pay for it. Ergo, they are a moving hazard to start with.
Others just figure it's always someone else's problem to be responsible, not theirs.
As it is now, an insurance company reserves the right for subrogation to go after another driver via your comprehensive or collision coverage. I don't really see how "no-fault" would create any more attorneys in the system than it does now, unless no-fault insurance is essentially a comprehensive property damage policy and the number of comprehensive claims would go a lot higher than they are now.
Someone please explain if there is any real difference on remuneration from a no-fault or comprehensive/collision coverage.
The liability insurance issue is an on-going source of anger/aggravation to me. Mainly because people who flout the law show a disrespect for other's property and I have a huge $%&*-on for personal responsibility.
I've had one accident in 25+ years of driving. That was when I was 17 and slid into a curb on the BA/I-44 cloverleaf exit when it was slick one night and I was going a little faster than was practical in the conditions. Learned my lesson about the physics of a front wheel drive car going around corners too fast on slick roads. [;)]
I'm not saying that I'm not capable of causing a wreck, but since past history is the best predictor of the future, the way I look at it, my next accident will likely be caused by someone else. And there's a pretty good likelihood that it would be someone with no insurance. That's why I carry comp and collision on my vehicle even though it's paid off.
quote:
Originally posted by okiebybirth
Twenty-four states now have variations of no-fault auto insurance, but fierce opposition by the insurance industry and the legal profession has rendered many of these laws ineffective.[8] Under the adversarial system of fault insurance, 55 percent of those seriously injured receive no compensation, and the average monetary loss is $76,341. However, a U.S. Department of Transportation study showed that they receive only an "average of $3,742, or 5 percent of their loss." By contrast, in Michigan under no-fault insurance, 260 claims for "catastrophic" medical costs (more than $25,000) were compensated an average of $108,000 each. Of these, 32 percent were single-vehicle accidents where there was no other driver to sue. Fifteen percent of the single-vehicle accidents were motorcycle accidents, which are usually catastrophic. Such accidents are, under current insurance coverage, usually uncompensated.[9]
[8] Tobias, Auto Insurance Alert, pp. 4, 54-61; Jeffrey O'Connell, The Lawsuit Lottery (New York: The Free Press/Macmillan Publishing Co., Inc., 1979), pp. 158-61.
[9] Jeffrey O'Connell, Lawsuit Lottery, (New York: The Free Press/Macmillan Publishing Co., 1979), pp. 157-175.
http://www.ied.info/books/www/insurance.html
Interesting statistics.
Make insurance laws more strict. No excuse not to have basic liability if you're an American and driving.
Make more illegals legal so they won't be scared to pay for insurance.
As it stands now, police will have your vehicle towed if they stop you and the tag is more than 90 days out of date.
That is mandated by state statute. The tax man always gets his tax.
I think car impoundment and a database linked to insurance companies would be a great idea so OTC knows if someone went back and cancelled their insurance 30 days after buying their tag.
While the link to insurance companies by computer is not in place, insurance companies are required to notify the state if someone drops their insurance. The state then requests proof of insurance from the driver. If they fail to provide that back to the state, the person's drivers license is suspended and the state authorizes the police to confiscate the car's license plate and the person's driver's license.
quote:
Originally posted by Wilbur
As it stands now, police will have your vehicle towed if they stop you and the tag is more than 90 days out of date.
That is mandated by state statute. The tax man always gets his tax.
I think car impoundment and a database linked to insurance companies would be a great idea so OTC knows if someone went back and cancelled their insurance 30 days after buying their tag.
While the link to insurance companies by computer is not in place, insurance companies are required to notify the state if someone drops their insurance. The state then requests proof of insurance from the driver. If they fail to provide that back to the state, the person's drivers license is suspended and the state authorizes the police to confiscate the car's license plate and the person's driver's license.
You're still not getting the person off the road. Think about it. You couldn't have gotten the license plate without insurance. So either their license plate is already invalid or they are in the habit of buying insurance and then immediately canceling. Plus, nothing is being done to the at the scene when they are pulled over.
quote:
Originally posted by Wilbur
As it stands now, police will have your vehicle towed if they stop you and the tag is more than 90 days out of date.
That is mandated by state statute. The tax man always gets his tax.
I think car impoundment and a database linked to insurance companies would be a great idea so OTC knows if someone went back and cancelled their insurance 30 days after buying their tag.
While the link to insurance companies by computer is not in place, insurance companies are required to notify the state if someone drops their insurance. The state then requests proof of insurance from the driver. If they fail to provide that back to the state, the person's drivers license is suspended and the state authorizes the police to confiscate the car's license plate and the person's driver's license.
Sounds like selective enforcement between the two laws. I'm not in the habit of hanging out with scofflaws, but I've never heard of anyone getting their license suspended or tag confiscated over that. I think impoundment of the vehicle should apply equally to O/D tags and no insurance.
Now, that being said, do the insurance companies report a "lapse" in coverage, or a flat cancellation?
...I've never heard of anyone getting their license suspended or tag confiscated over that.
Happens a lot, although, if you and your friends are in the habit of keeping everything up to date, that probably isn't something you would run into.
And it doesn't necessarily mean it is just dropped insurance. Some people buy insurance, then drop it a month or two later because they found it cheaper some place else. The first insurance company notifies the state, who sends out the notice to the driver. The drivers who ignore the notice, still get their license suspended, even though they may still have insurance, just through a different company.
I think impoundment of the vehicle should apply equally to O/D tags and no insurance.
Contact your state representative. There is nothing in statute that permits the police to tow a car for lack of insurance.
Now, that being said, do the insurance companies report a "lapse" in coverage,...
I'm not positive on that one.
Since oklahoma has a problem with uninsured motorists, and illegal immigrant motorists...
We have a far worse problem of legal residents with no insurance then we do with illegals. There is nothing that prevents an illegal from purchasing insurance, and many have it.
Some studies to show rates are actually lower in no-fault states.
If the rates are lower and I don't get dinged for making a claim on a wreck that is not my fault, I'll vote for it!
I call BS on the stats posted by okiebirth. The claim that the 'average' loss in a car accident is $75,000 is simply asinine. I worked for a very well known PI firm in town and saw way too many of these claims... I saw maybe 20% of claims that were over $75,000. I would say your standard MVA is closer to $30,000 in Oklahoma. Perhaps the average gets to 75,000 because you have the very rare case where the damages are extremely high (death = loss of consortium, future income, etc.). In those instances no fault wont help either because it would far exceed most peoples payouts limits.
and 5%? I call BS on that too. Of the claims I know of the victim was compensated 100% the majority of the time - even after our fees (word of mouth is our best business model). Those numbers are HORRIBLY skewed in part because the people that cause their own "catastrophic accident" receive no compensation. As stated, the solo accidents and the guy who hits the front break a little hard and goes over the handlebars get nothing... as they hurt themselves.
They are further skewed by people who do not comply with the current law. Many people get no compensation because the bastard that him them has no insurance. These people are not likely to comply with any future laws either... BUT WHEN THEY GET HURT THEY WILL SUE just the same. The little pricks wont contribute to the system at all, but will get their money anyway.
Furthermore, the vast majority of accidents are minor accidents that do not get reported to the policy. In fact, by law, accidents with damages less than a certain amount are not reported. So all those LOW NUMBER cases arent included at all... but every high dollar case is.
And they are finished off by the monster damage claims that are over their policy limits.
I agree that a no-fault system sounds good. I would love to pay for MY driving history and be able to collect based on what I pay in. However, the system wont cure the problems cited as a need for a new system:
1) policy limits wont go up - so monster awards still wont be paid in full
2) people still wont comply with the law
3) you will still need an attorney to negotiate with your insurance company
4) insurance companies will still sue each other for subrogation
5) people without insurance will still sue you for money
6) people will still sure for funds above policy limits
So attorneys are just as much in the game as they were before and the payouts wont go up at all (common sense should tell you payouts wont go up unless premiums go up). As an added bonus, with no fault, if someone with no insurance runs into me: I pay for it. If I run into someone with no insurance - they sue me and I pay for it. Win win!
Basically, what is this going to solve?
quote:
Originally posted by Wilbur
...I've never heard of anyone getting their license suspended or tag confiscated over that.
Happens a lot, although, if you and your friends are in the habit of keeping everything up to date, that probably isn't something you would run into.
And it doesn't necessarily mean it is just dropped insurance. Some people buy insurance, then drop it a month or two later because they found it cheaper some place else. The first insurance company notifies the state, who sends out the notice to the driver. The drivers who ignore the notice, still get their license suspended, even though they may still have insurance, just through a different company.
I think impoundment of the vehicle should apply equally to O/D tags and no insurance.
Contact your state representative. There is nothing in statute that permits the police to tow a car for lack of insurance.
Now, that being said, do the insurance companies report a "lapse" in coverage,...
I'm not positive on that one.
Since oklahoma has a problem with uninsured motorists, and illegal immigrant motorists...
We have a far worse problem of legal residents with no insurance then we do with illegals. There is nothing that prevents an illegal from purchasing insurance, and many have it.
Some studies to show rates are actually lower in no-fault states.
If the rates are lower and I don't get dinged for making a claim on a wreck that is not my fault, I'll vote for it!
I'd like to see the stats on legal vs. illegal citizens buying LI. Perhaps on gross numbers- yes, per capita no way. I find that assertion to be highly suspect. Illegal Hispanics are still a minority in Oklahoma so yes, I could swallow that the gross number is less.
Most illegals are petrified to have their name on any computer database somewhere.
One comment on the insurance problem that everyone is forced to deal with in one way or another..
Governor Keating took the wheels off the wagon on this when he did away with the "Safety Inspection" portion of the State Vehicle code.
I would like to see annual Safety inspections of all Motor Vehicles be part of the tag renewal process.. At that time you would also have to supply proof of Insurance to acquire your safety and license tag..
As the law is now... the cars on the road with you may or may not have brake lights that work, turn signals that work, tires with enough tread life to bring them to a stop at anything over 10 mph without going into a full skid mode, headlights that work, and also that they have an insurance policy that covers a minimum of liability..
California does this along with the annual "smog inspections required"... It seems to help.
Keating did a true injustice to the Oklahoma Motorists with allowing the "Safety Inspection" go bye bye..
[B)]
People with no money to go after, or people with hidden money- or money in another country have no reason to buy insurance. Illegal aliens have nothing to lose by driving with no license or insurance. There's nothing they can do to them. it's even unlikely that they will get deported.It's a win-win for illegals no matter what they do. I wish I could drive uninsured and with no license too.
Sure there is something you can do - take the vehicle.
I dont care who owns it, unless it was stolen take it and sell it. Bank owns it, too bad. Banks usually require borrowers to have insurance anyway, so its not likely an issue. It probably wouldnt settle everything, but at least its taking SOMETHING from the jerk that caused the damage.
I'm sure it would always be their "brother's car."
I heard on KRMG news at lunch a state law maker has made a proposal for seizure and sale of vehicles driven with no liability insurance. I didn't catch the law maker's name, can't find the story on KRMG's web site and I don't have the time to research the house or senate web sites at the moment.
They said the proposal would allow for those who can prove they had insurance at the time of the stop to get their car back. Otherwise, it would be sold at auction.
It's about time...
I believe that is SB49 by State Senator Patrick Anderson of Enid.
Thanks RM. I read it over, it is stuck in a public safety bill which also amends forfeiture of property by drug runners, cultivators, and manufacturers, it looks like.
It's item 10 on page four for those of you interested:
http://webserver1.lsb.state.ok.us/2007-08SB/SB49_int.rtf
How can the State or municipality have the authority to sell property that is now owned by the person.
Most motor vehicles are on loan from one financial institution or another.
That law would create an enormous amount of Paper Work and Red Tape.
quote:
Originally posted by AMP
How can the State or municipality have the authority to sell property that is now owned by the person.
Most motor vehicles are on loan from one financial institution or another.
That law would create an enormous amount of Paper Work and Red Tape.
Not really that much more work. One addtional notice and the OTC already has that info on file.
Lien-holders require property insurance on vehicles. They are set up as "loss-payee". If insurance coverage lapses, the lender is notified in writing, they force-place coverage, and add it to the payment. I believe they force-place comp/collision only- not liability. If their vehicle gets seized, they have the option of showing up at auction to buy it back, or they are just SOL. It would require only one more notification that the car is being sold at auction, and that is info the OTC already has on file from the lein.
I'd be willing to bet the majority of cars w/o liability are either paid for in cash or tote-a-note cars.
I wish I could drive uninsured and with no license too.
You can!
From KOTV-6: The Independent Insurance Agents of Oklahoma shares the desire to do something about uninsured motorists. But they say technology needs to be upgraded to provide safeguards for innocent drivers, so their vehicles aren't impounded. Anderson said someone who has liability insurance but simply forgets to carry proof of it in his or her vehicle would likely not have to forfeit the vehicle.
This technology needs to happen first. There is currently no way for law enforcement to know who has insurance and who doesn't other then a little piece of paper in a car. And with many insurance companies, such as Geico and Progressive, which are bought over the internet, you simply print your own proof of insurance off the internet. Nothing stops any one from doing that, whether they have insurance or not.
And the number of times law enforcement runs into people who simply forgot to put their new insurance form in the car is ridiculous. I'm not interested in towing these cars off, knowing full well they probably have insurance. How many house wives walk off down the street with their groceries and their little kids in tow because they don't have their current insurance in the car. There is currently no way to verify insurance.
Some states do this through their Department of Public Safety, which is then made available to law enforcement.
quote:
Originally posted by Conan71
quote:
Originally posted by AMP
How can the State or municipality have the authority to sell property that is now owned by the person.
Most motor vehicles are on loan from one financial institution or another.
That law would create an enormous amount of Paper Work and Red Tape.
Not really that much more work. One addtional notice and the OTC already has that info on file.
Lien-holders require property insurance on vehicles. They are set up as "loss-payee". If insurance coverage lapses, the lender is notified in writing, they force-place coverage, and add it to the payment. I believe they force-place comp/collision only- not liability. If their vehicle gets seized, they have the option of showing up at auction to buy it back, or they are just SOL. It would require only one more notification that the car is being sold at auction, and that is info the OTC already has on file from the lein.
I'd be willing to bet the majority of cars w/o liability are either paid for in cash or tote-a-note cars.
First, don't bet on it. 2nd - most banks don't force place insurance, and as you mentioned if they do, it doesn't include liability.
3rd, the red tape & cost is already enormous to get a vehicle out of impound. Believe it or not, it could take days before the impound notice finally reaches the lien holder. $30/day storage adds up very quickly. Then there is the money that the bank has to pay to their repo company to go get the vehicle. Not to mention the lender has to wait on a repo title from the state before they can begin to secure their vehicle (this adds more time to the process and thus more money to wrecker company).
You also mention that the bank can show up at the auction and buy the vehicle back?? That makes absolutely no sense. Let's say someone owes $8K on their car, and then the state takes it from them. I seriously doubt a bank will sink another $8k in the deal just to turn around and sell it at another auction for probably less than they had to pay the state to get it out of hock?
If this passes, get ready for higher automobile interest rates to compensate for additional risk associated with a car loan.
I agree people must have insurance on their vehicles. But I don't think this is going to change anything. I firmly believe that most people want to have insurance. But unfortunately, whether you want to admit or not, we live in a poor state. Taking someone's vehicle would just to make a bad situation worse for them and their family and would only benefit the local police (by increasing revenues from auction proceeds) and wrecker companies. I understand that if someone is out and about with no insurance and have a major wreck – that too can make a bad situation worse as well. That's why I believe a better alternative is No Fault Insurance (as this thread originally started as).
How can the State or municipality have the authority to sell property that is now owned by the person.
Law enforcement has these authority to take anything that can be determined to be proceeds from drugs. This includes homes, automobiles, .... Taking a car for insurance, I assume, would be similar.
But, law enforcement must demonstrate to the court the car/home.... has no liens. Otherwise, if liens are present, law enforcement has the option to pay off the lien in order to keep the property.
And many have mentioned most of the cars without insurance are paid for. That maybe, but look what condition they're in. Who would want them? And it would probably cost more in manpower then what little money you would get out of it compared to all the time it took to confiscate and try to sell.
and as I stated.... if it is on loan from a financial institution they are required to keep insurance on it anyway.
If it is on loan from a bank then give it back to the bank. If its the brothers, charge the brother for impound and give it back (dont loan your car to people without insurance ffs).
Everyone has SOMETHING to take, even if its just making your brother mad at you.
quote:
Originally posted by ttownclown
First, don't bet on it. 2nd - most banks don't force place insurance, and as you mentioned if they do, it doesn't include liability.
3rd, the red tape & cost is already enormous to get a vehicle out of impound. Believe it or not, it could take days before the impound notice finally reaches the lien holder. $30/day storage adds up very quickly. Then there is the money that the bank has to pay to their repo company to go get the vehicle. Not to mention the lender has to wait on a repo title from the state before they can begin to secure their vehicle (this adds more time to the process and thus more money to wrecker company).
You also mention that the bank can show up at the auction and buy the vehicle back?? That makes absolutely no sense. Let's say someone owes $8K on their car, and then the state takes it from them. I seriously doubt a bank will sink another $8k in the deal just to turn around and sell it at another auction for probably less than they had to pay the state to get it out of hock?
If this passes, get ready for higher automobile interest rates to compensate for additional risk associated with a car loan.
I agree people must have insurance on their vehicles. But I don't think this is going to change anything. I firmly believe that most people want to have insurance. But unfortunately, whether you want to admit or not, we live in a poor state. Taking someone's vehicle would just to make a bad situation worse for them and their family and would only benefit the local police (by increasing revenues from auction proceeds) and wrecker companies. I understand that if someone is out and about with no insurance and have a major wreck – that too can make a bad situation worse as well. That's why I believe a better alternative is No Fault Insurance (as this thread originally started as).
There's a difference in being poor and making poor choices on legal priorities. Granted, I don't live paycheck to paycheck these days but I have in the past and I had times where it was a struggle to keep my auto insurance premiums paid up, but I did because I was required to by a lender and/or the state. It was my legal responsibility.
As far as banks buying back a vehicle with a lein at auction- it doesn't necessarily mean they are going to have to buy back a car with an $8000 balance for $8000. They will have to buy it for whatever high bid is, That may just cover whatever the storage was. If it's more than what they can reasonibly re-sell for minimal loss- they walk away. If they do get it, they will turn around and re-sell it. Either that or the state should turn the car over to the lein holder.
Banks almost always lose on any repo action as it is now. They go after the borrower for the deficiency balance. If they can't collect it, they report it as a loss and 1099 the borrower and the borrower gets taxed on it as income. I don't think you would see that much of a change if any in interest rates because borrowers with first tier credit are far more likely to have the character and ability to pay their auto insurance premiums when due. The lenders who probably have the worst track record for drivers with lapses in insurance are tote-a-note lots. Those customers pay through the nose to get a car because either they don't have a proven credit track record or they've already blown it with credit. It's not going to affect the interest rate of most people who buy new cars or late model used.
The law may also necessitate a change to where the banks can force place property and liability insurance on the vehicle so they can keep from being stuck with a car in impound.