Financial responsibility for drivers has arrived

Posted By | January 7, 2002 12:00 am

Emily Moorehead
Major changes for drivers began on January 1, 2002, due to the passing of an amendment to Tennessee’s financial responsibility law.
This amendment requires drivers to provide proof of financial responsibility when cited for any moving violation, auto accident or during roadblock checks of vehicle registration and license.
“The rush we are seeing now is the people that want to comply with the law,” said John Cheek of Cheek Insurance.
“Uninsured motorist coverage is one of the best coverages you can have for the dollar; we won’t write a policy without it.”
Cheek stated he thought it would be interesting to see how effective is the new law.
“Is it going to safer on the roads?
I don’t think you’re going to see any difference on that,” he said.
“What’s going to be interesting is to see how they enforce it.
Eventually, it will be a requirement to show proof [of liability insurance] at vehicle registration and/or driver’s license registration.”
Before the amendment was passed, drivers were required to provide proof of insurance only if they were involved in a crash that resulted in more than $400 worth of damage, or if they had been convicted of serious violations such as reckless driving or driving under the influence of drugs or alcohol.
To comply with the new law, drivers will be required to carry an insurance card in their vehicle, or the declaration page of a liability insurance policy to be able to provide instant proof of financial responsibility.
“Beginning Jan. 1, when a law enforcement officer issues a citation for any moving violation, or when an officer investigates a crash, they will be asking all drivers to provide proof they are in compliance with the state’s financial responsibility law,” said Safety Commissioner Mike Greene. “Most commonly, that will be an insurance card or similar documentation certifying the driver does have minimum liability insurance.”
Under the new law, a conviction for failure to provide proof of liability insurance will result in a $100 fine and a driver license suspension. The license can be reinstated only after the driver provides proof of insurance and pays a $65 reinstatement fee. The penalty will be increased beginning July 1, 2003. Upon conviction after that date, violators will not be able to renew their automobile registration until they are able to furnish proof of financial responsibility.
“I think the law is a fair law, and it brings a lot of people to the insurance system that would never have been there before,” said Stan Hensley, a representative of Ward Insurance.
“It makes driving a little more economical for other people because they don’t have to worry about someone hitting them without insurance.”
Commerce and Insurance Commissioner Anne Pope stated now was a good time for consumers to review their auto policies with insurance agents.
She cautioned drivers not to wait until questioned by authorities with regard to liability coverage, but to contact an insurance agent concerning coverage to be certain they are in compliance with the law.
“We need to be careful and use great caution with those who neglected having any liability insurance in the past,” said Randy Wallace of Farm Bureau.
“We don’t want to insure everyone that comes through the door.
I think the people that are obtaining liability insurance now, and having to pay that premium, would be a little more cautious of how they drive, and more aware of other drivers.”
Bill Summary for SB0334 / HB1576
This bill would prohibit the commissioner of safety from issuing or renewing any motor vehicle registration unless the application is accompanied by proof that the vehicle and its owner have met the requirements of the Tennessee Financial Responsibility Law of 1977. This bill would require every registration to contain the following notice: THIS REGISTRATION SHALL AUTOMATICALLY TERMINATE UPON THE FAILURE TO MAINTAIN EVIDENCE SHOWING THAT THIS VEHICLE AND ITS OWNER MEET THE REQUIREMENTS OF THE TENNESSEE FINANCIAL RESPONSIBILITY LAW.
The following items would be sufficient proof that a vehicle and its owner have met the requirements of the Financial Responsibility Law:
(1) A certificate from an insurance company stating that an insurance policy which meets the requirements of the Tennessee Financial Responsibility Law of 1977 has been issued and will be in force during the period of registration; or (2) A certificate issued by the commissioner stating that a cash deposit or bond in the amount required by the Tennessee Financial Responsibility Law of 1977 has been filed with the commissioner’s office for the period of registration.
This bill would also require that upon the cancellation or termination of an insurance policy which was the basis of the proof to the commissioner, the insurance company must provide notice to the commissioner and the insured within five working days that the vehicle no longer meets the requirements of the Financial Responsibility Law. Under this bill, the vehicle registration would automatically terminate within 10 working days unless the requirements of this bill are met.
This bill also would require that upon withdrawal of the bond which was the basis for the certificate provided by the commissioner, the commissioner must notify the registrant within five days that the vehicle no longer meets the requirements of the Financial Responsibility Law and that the registration will automatically terminate in 10 working days unless the requirements are met.
This bill would require the commissioner to notify a person regarding an impending termination of registration due to insurance cancellation or bond withdrawal. Under this bill, an insurance company that fails to provide notice of the cancellation or termination of a policy to the commissioner could be held liable to the extent of the original policy limits for an accident the policy would have covered during the period of validity of the certificate or until notice is provided to the commissioner, whichever is earlier.
ON APRIL 23, 2001, THE HOUSE ADOPTED AMENDMENTS #1 AND #3 AND PASSED HOUSE BILL 1576, AS AMENDED. AMENDMENT #1 rewrites this bill. This amendment would prohibit the operation of a motor vehicle on the highways of Tennessee without proof of compliance with the financial responsibility law.
The following would constitute financial responsibility:
(1) An insurance card; (2) A certificate from the commissioner of safety certifying that the bearer has posted a bond or is self-insured; or (3) The motor vehicle is owned by a carrier subject to the jurisdiction of the department of safety or the interstate commerce commission, or is owned by a governmental entity, and the vehicle was being operated with the owner’s consent. Failure to provide evidence of compliance with the financial responsibility law would be a Class C misdemeanor punishable by a fine of up to $100.
Present law requires the commissioner to suspend the license and registration of any person who does not provide proof of compliance with the financial responsibility law after the commissioner receives notice that the person has been convicted of DUI, reckless driving, driving without a license, driving on a suspended or revoked license, driving an unregistered vehicle, driving a vehicle with a revoked registration, failing to stop after an accident, refusing a drug or alcohol test, vehicular homicide, failure to satisfy a citation or forfeiture of bail or bail not vacated or failure to pay a fine for any such violation.
This amendment would replace present law with a requirement that the commissioner suspend the driver license of any person convicted of failure to show evidence of financial responsibility. A person could have their license reinstated by providing proof of financial responsibility and paying the fine for the offense. This amendment would take effect January 1, 2002. AMENDMENT #3 requires law enforcement officers to obtain proof of financial responsibility from all persons involved in a traffic accident where there is injury, death or apparent property damage of $50.00 or more.
Beginning July 1, 2003, this amendment requires all convictions for failure to comply with the financial responsibility law and all dismissals where an offender did not comply with the law at the time of the citation but comes into compliance by the time of the court date to be reported to the department of safety. This amendment prohibits the commissioner of safety from renewing the registration for any vehicle for which the department receives notice of non-compliance until the owner produces proof of compliance with the financial responsibility law.
ON APRIL 30, 2001, THE SENATE SUBSTITUTED HOUSE BILL 1576 FOR SENATE BILL 334 AND RESET HOUSE BILL 1576. ON MAY 2, 2001, THE SENATE FURTHER CONSIDERED HOUSE BILL 1576, ADOPTED AMENDMENT #3, AND PASSED HOUSE BILL 1576, AS AMENDED. AMENDMENT #3 makes the same changes as House amendment #3 but also specifies that no litigation tax, as well as no court costs, would be collected from a defendant who was in compliance with this bill but was cited because such person was unable to produce evidence of compliance at the time of the citation.

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