AB 60 driver licenses believed to cause 2015 bump in insured vehicles

News: 2016 Press Release

Department of Insurance sees unexplained increase of 200,000 insured vehicles in 2015.

SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today that AB 60 (Alejo 2013), which provided California driver licenses to those who could not submit proof of legal presence in the United States, might have led to a modest decrease in the number of uninsured motorists in California.

According to a preliminary analysis by the California Department of Insurance, in 2015, the first year since the passage of AB 60, the number of insured vehicles increased by 200,000 more vehicles than would have been expected. In the previous three years, the percentage of insured vehicles increased at the same rate as the number of registered vehicles, but the department’s analysis shows an unexpected increase in the number of insured vehicles in 2015.

“Many hoped to see an increase in insurance after California issued AB 60 driver licenses, and this preliminary data appears to show more insured vehicles than we would have expected in 2015,” said Insurance Commissioner Dave Jones. “This needs more study, but the preliminary data is encouraging.”

Under AB 60, the California Department of Motor Vehicles (DMV) can issue an original driver license to an applicant who lacks proof of legal presence in the United States and meets all other requirements to obtain a driver license.

While the department believes the increase in insured automobiles can likely be attributed to AB 60, it is important to note there is an apples-to-oranges relationship between drivers licenses, registered vehicles, and insured vehicles. Every new AB 60 driver license would not be expected to yield a new insured vehicle because of the following:

– Californians do not need auto insurance to obtain a driver license (but they do need auto insurance to register a vehicle).
– Prior to AB 60, undocumented immigrants could register a vehicle with a Matricula Consular or an out-of-state driver license.
– Before AB 60, undocumented immigrants may have had a properly insured and registered vehicle, but not had a California driver license.
– Attempting to tie the number of insured vehicles directly to the number of driver licenses is not an accurate representation of the number of insured vehicles, as there are may be multiple drivers for one vehicle and the insurance follows the vehicle.

It is also possible that other factors, including the improving economy and lower gas prices, allowed more Californians to make installments payments and keep their auto insurance in force.

Media Notes:
An August 2014 report by the Insurance Research Council found that California had 4.1 million uninsured motorists (14.7%) based on 2012 data. See http://www.iii.org/fact-statistic/uninsured-motorists. The IRC has not issued an updated report since AB 60 took effect.
More about AB 60: https://www.dmv.ca.gov/portal/dmv/detail/ab60.
Every person registering a car must provide proof of financial responsibility (insurance) at the time of vehicle registration, but miss installment payments and allow their insurance to lapse.

For original release, click<a href=”http://www.insurance.ca.gov/0400-news/0100-press-releases/2016/release133-16.cfm”> here</a>.

For Release: November 17, 2016
Media Calls Only: 916-492-3566

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