By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
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By Melanie Asmar
Insure-Rite charged the state 67 cents per registered vehicle and also charged the state 75 cents for each of the letters it sent. When the program started, Insure-Rite announced that it figured that 23 percent of the motorists in Utah had no insurance.
Recipients were told that a computer search showed that they had no insurance and that state law mandated that they get it. The letter went on to say that if they did have insurance, they had to provide proof in person or writing or face possible criminal prosecution.
Insure-Rite won't say what the exact number was, but insurance agents guess that 100,000 insured motorists mistakenly received letters. The state legislature's auditor general estimates that 300,000 letters went out between July 1995 and March 1997, but he says it is unclear how many of them went to the same people or how many were sent erroneously.
Brian Allen, an independent insurance agent with about 17,000 clients signed up through four different insurers, says he had to hire a full-time clerk just to help his clients prove that they did, indeed, have insurance.
If another Utah insurance agent's experience is a guide, however, an unexpected benefit to the industry has arisen: a chance to try to talk already-insured motorists into buying other types of insurance. Autumn Hoescher, an agent who sells insurance from six different companies through the Beehive agency of Salt Lake City, says that when her clients call her to establish proof of insurance, she takes the chance to "give them more service."
But to the insurance industry, the program's problems far outweigh that unintended benefit. Allen, a former cop, points to one flaw: Police can use the Insure-Rite database to see whether drivers have insurance, but Allen says cops mistrust the new system because of the adverse publicity it's received. "Given a choice between the [insurance] card they have in front of them and what some computer says, they are going to believe the card," Allen says.
In fact, when word got around in the state that Insure-Rite's warning letters were so often wrong, people began to just ignore them. Utah's new law doesn't provide for special enforcement powers to back up the letters' threat. (Neither does Colorado's version.) "There wasn't much, if anything, that was going to happen," says Allen, "so people threw them in the trash."
One of those who paid attention to the letter he got was state senator John Holmgren of Bear River City, who had valid insurance. It turns out that Holmgren was a foe of the Insure-Rite program from the very start, and he was irked to have mistakenly received a letter.
"For as much money as they are getting, you'd think the thing would be more than perfect, and it is far, far less than that," Holmgren says. "And the worst part is that I don't think it's going to make a hill of beans' difference in the number of drivers out there without insurance."
Agents say that's true: Uninsured motorists don't seem to be flocking to buy insurance. Allen says he's gotten only a call or two per month from people asking for new insurance because they got an Insure-Rite letter. He says his business has climbed at the same rate as growth in the state, or exactly what he would have predicted with no Insure-Rite.
Other insurers agree. The law has been in place for more than two years now, and they say they have seen no increase in people signed up for insurance beyond the rate of population growth.
Insure-Rite is talking a good game, issuing statements about how its work is reducing the number of uninsured motorists. But the insurance industry isn't buying it. Chris Purcell, a claims attorney for State Farm, points out that even if thousands signed up for insurance and State Farm didn't sign up one of them, the company could still tell if new people were getting insurance. That's because State Farm pays out millions each year to the people it does insure when they have accidents with the uninsured. If the number of uninsured dropped by half, there would be fewer State Farm customers turning in claims against their uninsured-motorist coverage. Purcell says that hasn't happened. "We haven't seen even a blip," he adds.
A number of Utah agents contacted by Westword say there's no proof that the number of uninsured motorists has dropped by even 1 percent.
But not according to Insure-Rite. "I sat there and watched those numbers go down every month," Kasteler says. "I was not seeing things." When asked for copies of the numbers, Kasteler refers questions to Colorado lobbyist Green, who in turn says that Kasteler has them. (Kasteler did not return several follow-up calls asking for documentation.)
Utah legislators looking for more proof asked the state's legislative auditor general to look into the numbers. When Wayne Welsh did, he found that Insure-Rite hadn't kept the computer tapes that would have allowed his office to compare actual data.
So Welsh issued a report last month that said he was unable to tell whether the number of uninsured motorists had changed at all.
"While our tests documented that the currently reported rate appears to be accurate, a lack of data prevented us from confirming or denying that the rate reported in 1995 was actually 23 percent. Data from the first year of the program's operation was not maintained by Insure-Rite," wrote Welsh. "Consequently, we are unable to determine what impact the program has had on reducing the state's insured-motorist population."