Can illegal immigrants get auto insurance?
The term “illegal immigrant” refers to someone who has come to, or remained in, the United States without proper documentation. Normally, immigrants pass through the Department of Immigration and pay a fee to remain in the United States for a certain amount of time. However, many poor immigrants cannot pay the immigration fee, which is sizeable, or cannot obtain legal permission to enter the country, and so they enter illegally. The number of undocumented immigrants in this country as of March 2011 was estimated to be 11.2 million people by the Pew Hispanic Institute, although no one can be sure of the exact number.
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There are many legal, ethical, and political debates centering around this fact, and one of these concerns the rights of these undocumented immigrants to obtain drivers’ licenses and car insurance. While it might seem obvious that a person with no legal status in the United States should not be granted the privilege of a drivers’ license or car insurance, in reality many states and insurance companies are coming to realize that this is not a practical approach. Undocumented immigrants come to the United States primarily to secure jobs. Having employment, they are of necessity often driving back and forth to work, and if they cannot obtain a license and insurance, they will often drive without them.
While this is illegal activity, the fact remains that many states do not have the law enforcement personnel or the jail space to process the many cases that they see every day. Being unable to enforce the law makes it more likely that people will continue to break it, and a vicious cycle is born.
Further, when an undocumented alien causes a car accident, the victim’s insurance company often has to pay for the damage under the uninsured motorists’ section of the policy. This costs insurance companies a great deal of money every year, which is passed on to the insured consumers in the form of higher premiums. This is obviously unfair to those who have insurance.
Rather than simply allowing undocumented workers to drive without a license or insurance and cause expensive damage if they are involved in an accident, several states and insurance companies have nodded to reality and begun offering undocumented immigrants the opportunity to get a drivers’ license and purchase car insurance. The response has been mixed, but those who are in this country honestly to better their own lives often look at this as a way to validate their residence, which may be difficult or impossible by going through the legal immigration process.
What are the penalties for driving with no auto insurance?
Until the federal government determines what to do about the massive numbers of undocumented aliens, it will remain up to the states to craft their own laws and regulations regarding these people. It is also up to each insurance company to determine their own policies regarding undocumented workers. About 40 insurance companies currently offer some type of program for undocumented immigrants, primarily those operating in California, Florida, and other states with high immigrant populations.
There are several ways insurance companies offer insurance to undocumented aliens. First, if the person cannot legally get a drivers’ license in his or her state, the person is put into a “high risk” pool of auto insurance candidates. These are people who are difficult to insure and pay the highest premiums. If the undocumented workers pay the stiff premiums demanded for insurance, they will have liability and minimal coverage if they are involved in an accident. The issue of driving without a license is handled by the local law enforcement authorities, and the person can still be arrested for driving without proper licensing, even if he or she has insurance.
Another way that companies have tried to cover undocumented aliens is to offer them a pre-paid account card which can be used to help pay for damages caused in an accident. By working with banks that offer this service, insurance companies can be sure that an undocumented worker has enough cash to pay the premiums and the deductible on a high-risk policy.
Although it may seem a gamble for auto insurance companies to insure undocumented immigrants, the reality is that this group of people rarely report or make claims for minor accidents. Because of the dangers of being identified as undocumented, many immigrants try to call as little attention to themselves as possible, and will often offer to pay for minor damage in cash at the scene of an accident, even if the accident was not their fault. Insurance companies currently insure growing numbers of undocumented immigrants as this service is perceived to be a growth market. Without knowing how the federal and state governments are going to handle the immigrant problem, insurance companies are hedging their bets and taking advantage of this huge potential market.
