Law Sees O.C. Uninsured Run for Coverage

The new law requiring drivers to provide proof of insurance when they are stopped by police, or pay fines up to $2,750, is sending droves of people to local insurance agencies.

At High Risk Specialist, a Newport Beach agency specializing in providing insurance to people with bad driving records or who haven’t had insurance before, nine agents are fielding about 100 calls apiece daily and working 16 hours a day to handle the deluge.

“I’m exhausted,” said agent Sean Lucero. “It’s been like this since Monday, and we just keep getting more and more calls.”

Since Jan. 1, the consequences of being caught by police without auto insurance are so stiff that even those who have been reluctant to pay for it in the past see the benefit of having it, Lucero said while juggling phone calls.

At PHD Insurance brokers in Garden Grove, agents were so busy that they didn’t even have time to talk about it.

“I’m so sorry,” said the office receptionist. “But everyone’s on the phone with customers. We’ve been totally overwhelmed with these calls ever since Christmas Eve. It’s unbelievable--people are actually walking in off the streets.”

State law has long required car owners to have liability insurance. But the part of that law that allowed police to ask for proof of insurance was allowed to lapse by the Legislature in the mid-1980s.

“The tickets we use still have a box for that; we just haven’t been able to use it for a while,” California Highway Patrol Officer Tim Santillan said. “For the most part, the law is the same as the one we used to have, but the penalties are a lot stiffer.”

Under the new law, police will ask motorists for insurance documentation or the name of their insurance company and a policy number. Drivers who have insurance but cannot provide that information can avoid steep fines by providing it in court later.

The law increased the fines for driving without insurance. The old fine was a minimum of $250. But now, first-time offenders will pay at least $1,375 and as much as $2,750, according to Robert B. Kuhel, executive director of Orange County Municipal Court in Santa Ana.

Repeat offenders also now face the threat of a suspended license and, with a court order, having their car impounded.

The new law also requires car owners to show proof of insurance when they renew their registrations. Until now, owners were required only to supply the Department of Motor Vehicles with the name of an insurance company and policy number, neither of which was generally checked. Under the new law, they must submit a copy of the card issued by their insurance company.

Because an estimated 4 million to 6 million Californians are driving without insurance, both police and court officials anticipate a possible flood of citations under the new law, Kuhel said. Orange County court officers have met several times to discuss the possible impact, but Kuhel said the deciding factor will be the enforcement level by police, who have the discretion to let drivers off with a warning.

San Diego County court officials have opted to hire new staffers to handle a wave of new work generated by the law, but their Orange County counterparts have decided to wait to see if the caseload will indeed swell.

“In these tight fiscal times, it’s hard to ask for resources that we kinda, sorta, maybe need,” Kuhel said. “If everybody starts writing citations and we feel we’re getting a situation we can’t handle, then we would seek additional support.”

Although the new law has doubled and even tripled the amount of business for many insurers, not all agents see the boom as good for business.

As Chuck Adams, the owner of Calstate Insurance in Tustin, notes, the people coming into the agency’s door now might not be the most desirable customers.

“Often these are people that really didn’t buy insurance before because of the cost, and the cost was high because their driving records also are awful,” Adams said. “I’m talking about multiple drunk-driving offenses and lots of tickets.”

Lucero, however, said those seeking coverage from his agency are a diverse group, including some who gambled on their good luck but who now are playing it safe.

“I can’t say that all of the people who’ve been uninsured are one way or the other,” Lucero said. “We’re running into people who’ve never had insurance but who have excellent records. I had a man yesterday who’s 52 years old and hadn’t had insurance since he was 17.”