No proof of car insurance? In some places, prepare to be towed

Gina Roberts-Grey

In nearly every state, drivers must be able to provide proof of a car insurance policy for the vehicle they’re driving. Otherwise, they face fines and penalties.

But in Louisiana, the consequences just got a bit tougher. The driver of a vehicle registered in Louisiana who doesn’t have proof of insurance could see his or her car being towed away — at the driver’s expense.

In early 2012, Louisiana Gov. Bobby Jindal signed a bill into law that allow cops to punish drivers who can’t produce proof of insurance by sending their car away on the hook of a tow truck. This new law repeals a 5-year-old ban on impounding the cars of first-time offenders.

Not being able to prove you’ve got car insurance is already costly; several states and municipalities levy hefty fines. The fine in Michigan is $200 for the first offense; Boulder, Colo., has a maximum fine of $1,000 and 90 days in jail if you don’t have proof of insurance.

In California, drivers who can’t provide proof of insurance can be fined between $100 and $200. “There may also be penalties and court costs if you can’t produce proof you carry the state-mandated minimum liability coverage,” says Pete Moraga, a spokesman for the Insurance Information Network of California. It’s estimated that about 15 percent of California’s drivers are uninsured.

In addition to the cost of the ticket, towing expense and fines, a ticket for not being able to show proof of insurance can hike up your car insurance.

In states like Michigan and California, a ticket for not having insurance is a moving violation, so it can score a driver anywhere from one to four points on his license. Amass too many points, and your car insurance company might raise your rates 5 percent to 20 percent (depending on the number of points and violations), according to Billy Van Jura, an insurance broker in New York.

Traditionally, drivers show proof of insurance by keeping paperwork in their gloveboxes or wallets. But several states now are letting drivers show proof of insurance on their smartphones or tablet devices.

Towing isn’t all that new

In November 2010, cops in Oklahoma started towing cars if a driver can’t produce proof of insurance. Drivers have 45 days to show proof of coverage and reclaim the car; otherwise, it will be sold at an auction. South Carolina is considering a measure similar to Louisiana’s and Oklahoma’s that would give cops the power to tow cars if a driver can’t produce proof of insurance.

California law allows for law enforcement officers to use their discretion to tow a vehicle if the driver does not have coverage, Moraga says. “Sometimes they’ll allow another insured driver to pick up the vehicle,” he says.

Arizona has a similar – but slightly less stringent — law, allowing cops to have a car towed away if driver can’t produce proof of insurance and has a suspended or revoked license.

In 2009, Dallas adopted an ordinance that gives cops the right to tow away and impound a vehicle at the vehicle owner’s expense, if a driver stopped for a traffic violation can’t produce valid proof of car insurance. Dallas’ ordinances already ensured the cars of uninsured drivers involved in accidents were towed at the owner’s expense.

So why did Louisiana decide to adopt a tougher stance? In Louisiana, law enforcement was unable to track the number of times an uninsured vehicle was stopped – the same uninsured vehicle could be driven by several drivers. The new towing law, with its instant consequences, was designed to crack down on this confusion.