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last updated on March 1, 2006

PRIVACY

MOTOR VEHICLE INFORMATION PRIVACY

THE ISSUE IS. Ensuring that automobile insurers are able to continue to access department of motor vehicle records as allowed under the 1994 Driver Privacy Protection Act.

IT'S IMPORTANT BECAUSE. In 1994, Congress enacted the Driver Privacy Protection Act (DPPA) as part of the Violent Crime Control Law Enforcement Act (Public Law 103-322). The law prohibits disclosure of personal information by departments of motor vehicles (DMVs), except for certain defined and necessary purposes such as law enforcement and safety recalls. The legislation was also carefully crafted to allow information to be obtained from motor vehicle departments for legitimate business purposes such as insurance risk evaluation and underwriting. Under the DPPA, individuals are able to opt-out of having their personal driver's license or motor vehicle information released for marketing purposes. States are also free to adopt more stringent provisions.

Insurance companies depend upon motor vehicle and driver's license information to properly evaluate risk, prevent fraud, promote safety and ensure that consumers are charged a fair and appropriate price for their automobile insurance premiums. Insurers must verify information with motor vehicle departments in case potential policyholders omit traffic violations or accidents from their insurance applications, or existing policyholders fail to report these incidents. Due to the use of motor vehicle records, good, safe drivers pay less for auto insurance than do those with numerous traffic violations.

NAMIC POSITION. It is critical that automobile insurers continue to have access to driver records in order to effectively evaluate risk and underwrite policies accordingly. Without this access, it would be impossible to set appropriate premiums based on drivers' records; and safe drivers could be forced to subsidize risky drivers. NAMIC supports the provisions of the 1994 DPPA, which place reasonable restrictions on the release of driver and motor vehicle records, while allowing access for legitimate business and safety purposes.

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