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Effects on Insurance Unclear

SANTA FE — One of the chief arguments made for adoption of New Mexico’s 2003 law allowing illegal immigrants to obtain state driver’s licenses was that the number of uninsured drivers would drop accordingly.

There are conflicting studies on whether that has happened and, if so, whether the law is the reason.

A recent study conducted by professors from New Mexico State University and Duquesne University in Pittsburgh concluded that enacting a more open driver’s license policy does not necessarily cause a decrease in uninsured rates.

In fact, the study predicted the opposite would likely be true because the open license law would attract new immigrant workers.

The study claims a 1 percentage point increase in illegal immigrants in the labor force would increase the state’s uninsured vehicle rate by about one-half percentage point.

“Based on the results, it is reasonable to expect that full implementation of a more stringent driver’s license legislation will have an additional benefit of reducing the uninsured motorists’ rate in states like New Mexico and Utah,” the study’s authors wrote.

Based on one measure, New Mexico’s rate of uninsured vehicles decreased from 33 percent in December 2002 to less than 10 percent in December 2008, according to a 2009 study that used data from the state’s Motor Vehicle Division.

That measure compares the total number of registered vehicles to the total number of vehicles with an insurance policy.

MVD reported the uninsured vehicle rate continued to drop in 2011, with 9.1 percent of registered vehicles on the road without insurance.

The department doesn’t track data showing how many foreign nationals who have New Mexico driver’s licenses have insurance, spokesman S.U. Mahesh said.

However, the decrease in uninsured drivers in New Mexico followed implementation of a new reporting law that requires insurance companies to provide information to the state, so it is impossible to tell how much of the decrease might be attributable to the law allowing foreign nationals to obtain licenses.

And in another measure, this one based on injury accident reports, New Mexico’s uninsured rate actually increased slightly from 2004 to 2009 — with 2004 being the year after the New Mexico law allowing illegal immigrants to obtain driver’s licenses was approved.

The Insurance Research Council, a nonprofit supported by insurance companies, using injury accident data, found that New Mexico’s uninsured motorist rate was 26 percent.

That made us second-highest in the nation. Only Mississippi was worse, at 28 percent. Two years earlier, in 2007, the council found New Mexico had the nation’s highest rate of uninsured motorists.

Meanwhile, a study, published in 2011 by the National Association of Insurance Commissioners, found a relationship between elevated high school dropout rates and an increase in uninsured motorist rates.

It also linked elevated uninsured rates to higher rates of vehicle crash fatalities.

New Mexico requires all registered vehicles to be insured, and law enforcement authorities can access a state database to check whether a particular vehicle has an attached insurance policy.
— This article appeared on page A4 of the Albuquerque Journal

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