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Naked Drivers

Christopher Gardner

Driving on a Dime: California requires drivers to carry auto insurance, but stopped routinely checking in 1992. Now, record numbersof all drivers ignore the law.

Uninsured motorists have grown from a third to more than half, especially among drivers who have less to spend--and lose

By Clarence Cromwell

DRIVING WITHOUT insurance is walking a tightrope without a net--one slip and you're wrecked. I'm one of those who should know: I stopped paying my $160-a-month insurance payment a couple of months last year, and then got into a six-car pile-up that the California Highway Patrol said was my fault.

The memory remains vivid: me in my car on a rainy night, rolling along on my way home from work, with the stereo up, in the slow lane of southbound Highway 280, fighting stop-and-go traffic about a half mile north of Winchester Boulevard. The last time I applied the brakes, at about 7pm, my 1993 Escort hydroplaned in a lazy clockwise spin and inched toward the lane to my left. A small turquoise car kissed the right front fender and sent me spinning across three more lanes of wet pavement. Two more sets of headlights broadsided my car. And another pair of cars joined the jam-pile, slamming the first two from behind.

At least two of the six cars were totaled, including mine. My share of the damages came to about $21,000, including the $7,000 I still owed on my car at the time.

I could be making payments on that for a long time.

Besides being risky, it's illegal to drive without insurance in California. But after my accident, I found out that thousands of other people are swinging from this highwire without a net.

AS IT TURNS out, statewide, nearly a third of drivers lack insurance--about 30 percent, according the California Department of Insurance. The figures get uglier in low-income and minority city neighborhoods, where more than half the drivers buzz around without insurance, according to a February 1995 insurance department report which examined insurance patterns, ZIP code by ZIP code. In two San Jose ZIP codes surrounding downtown, where median incomes plunge below $12,000 a year, the uninsured even outnumber the insured.

The least-insured neighborhood in San Jose is the 95110 zip, where 55 percent of car owners lack coverage.

Just to the east, in the 95112 ZIP, about 50 percent drive without insurance as well. By contrast, in Los Gatos' 95030 area, one of only two Los Gatos ZIPs, there is an uninsured rate of 11 percent. In nearby Saratoga's 95030, only 7 percent of drivers have no insurance. (See sidebar for listing of area ZIP codes and insured drivers.)

Other Bay Area neighborhoods with median incomes below $12,000 and minority populations greater than 85 percent have similar levels of uninsured motorists. In four Oakland neighborhoods and a single San Francisco ZIP less than half the drivers carry insurance.

Statewide, the problem is worst in the Los Angeles, Imperial, San Diego and Alameda counties.

With the exception of Alameda, the uninsured rates in those counties reaches into the 90 percent range. Alameda County's worst neighborhood is 63 percent uninsured, the 94621 area of Oakland.

A 65-year-old Sunnyvale resident, living in the 94086 ZIP code who rarely drives, who has been licensed more than 40 years and has no points, would pay as little as $222 a year. A 19-year-old male, licensed two years, with no tickets or accidents and driving his car 15 miles a day to school, would pay as much as $1,951 in San Jose's 95123 ZIP code.

DRIVERS SOMETIMES get away with flouting insurance laws because they don't have to furnish proof of insurance at the DMV unless involved in an accident or if they take let their license expire and are forced to take a driving test. Anyone otherwise eligible can get a driver's license and register a car without ever buying an insurance policy, although it's illegal.

Legislators let the law requiring police to check insurance papers during routine traffic stops expire in 1992. Now officers ask for proof of insurance only if one party in an accident doesn't furnish policy information to another, according to public affairs officer John Maxfield of the California Highway Patrol. But when CHP officers catch uninsured drivers they write tickets.

Insurance premiums vary radically. Californians may pay anywhere between $200 to $2,500 for basic coverage on one car. After my catastrophic crash, I found plenty of friends (mainly in the younger, higher-priced category) or their significant others who drive without insurance. Of course, they didn't want to have their names in print.

So I hunted for scofflaws on local streets.

Uninsured drivers say a combination of things drove them to the crime: lack of funds, the necessity of driving, and feeling that insurance is one thing they can survive without. When short on cash, most people would rather stiff the insurance company than someone who can turn off the lights, unplug the phone or evict them.

BOB ELHOFF, a 39-year-old San Josean with a dark beard and a rumpled shirt, calls insurance a sham. Elhoff is what you might call a deliberate defaulter. He has owned a car since 1988 without paying a single insurance payment and he doesn't plan to buy coverage anytime soon. Slumped on a chair in a First Street cafe midway through a three-man poker game, he says: "The insurance companies don't want to deal with people who don't have a lot of money. They don't want to have to structure the insurance around people who have limited financial ability."

"If you have a $500 deductible," Elhoff notes of many lower-income drivers, "you have no insurance."

Elhoff's uninsured driving career ended when police found him responsible for a pair of hit-and-run accidents in San Jose, he says.

Elhoff says he is charged with not only the two hit-and-run accidents, but also two counts of driving without insurance, to which he pleaded no contest. Elhoff said one of the other drivers hit him and ran and the other cut him off before speeding away.

Elhoff probably can't pay for the damages, anyway, because he's unemployed.

Another uninsured motorist, a 24-year-old San Jose resident named Jason, says he drives every day without insurance because he can't afford to support himself and pay insurance premiums on the $8.50 an hour he makes at a Silicon Valley firm. "I never made the decision [not to carry insurance]," Jason said. "I just didn't pursue getting it."

He used to be insured, but dropped a two-year-old insurance policy after messing up his car in a rear-end accident and then wrecking his girlfriend's car. After the accidents, he says, his insurance premiums went up so much he couldn't afford them. Now he calls insurance a waste of money.

"I don't think it's worth it because if you don't get in an accident, you don't get to use that money," Jason explains. He believes good drivers should get a rebate if they drive two years without mishaps. Six years after his accident he hasn't had another wreck and still lacks insurance.

"I just drive carefully," Jason adds.

PHILIP GOLDWORTH represents the other side of the equation. He lost $856 when an uninsured driver rear-ended his 1984 BMW 533I with a Volkswagen Squareback at Ahwanee and Morse avenues in Sunnyvale in April 1995. It did $1,700 worth of damage.

"We're still trying to get money," Goldworth says. "It's a real mess."

He had uninsured motorist coverage at the time, but the policy didn't cover the $356 for a rental car the week the BMW was at the shop, and it didn't take care of Goldworth's $500 deductible, either, something which wasn't exactly in his budget at the time.

Goldworth's insurance company took the uninsured driver to court for $1,700 in damages and won, but so far has been unable to collect the money.

Rich Shrader, spokesperson for the California State Automobile Association (AAA), said his company spends $52 million a year to cover damage done by uninsured drivers, such as the one who hit Goldworth. That raises rates for AAA customers.

When someone without insurance is involved in a crash, the other driver is forced to collect from his or her own "uninsured motorist" coverage. But the more claims filed, the more the company has to charge to recoup its losses. Uninsured motorist coverage makes up roughly 10 percent of most drivers' insurance premiums, according to Mark Chase, division manager of State Farm Insurance's California auto operations department.

Not surprisingly, the cost of uninsured motorist coverage for two hypothetical drivers goes up as the odds of encountering an uninsured driver increase. The cost of uninsured motorist coverage, quoted by Chase's company, doubled when the only difference was moving from a well-insured neighborhood to a low-income and minority neighborhood.

For a Los Gatos resident with one ticket, driving a 1995 Escort 100 miles a week, $27.36 of his or her $655.58 premium would go to uninsured motorist coverage, according to superintendent Walt Heagy of State Farm Insurance.

If the driver moved to downtown San Jose's 95112 ZIP, the same driver with the same car would pay $59.52 for uninsured motorist coverage with the full premium costing $807.67.

AAA DOESN'T RESEARCH why drivers cancel insurance, Lee Ford said, but casual contact with customers has confirmed that drivers who stop paying their premiums usually do it because they're short of money and choose to spend it on living expenses instead. Especially if bad driving increases their rates.

"Insurance is sort of low on the totem poll," Ford said.

Chase, the State Farm manager, said no-fault insurance would probably cut California insurance rates, if a no-fault law could get into the books.

"You don't care if you're hit by an insured or uninsured motorist because you're going to go back to your company and they're going to pay your medical bills and damages, regardless of fault," Chase said. "That's where a good, strong no-fault insurance law would help us."

Chase said eliminating the blame-placing would wipe out most of the work attorneys charge to insurance companies, thus wiping out a big part of insurance premiums.

No-fault is also credited, in the insurance industry, with reducing insurance fraud, Chase said, because people are less likely to file a phony claim with their own insurance agent.

State Farm provides no-fault coverage in 21 states and four Canadian territories where it is mandated.

But past initiatives, by consumer advocates, to introduce no-fault insurance in California met defeat by trial attorneys and other interest groups.

The state of California, besides requiring insurance, requires severe penalties for anyone caught driving without insurance.

After my catastrophic wreck, the Department of Motor Vehicles suspended my drivers license for a year. I paid a $250 penalty and had to provide proof of insurance for a restricted license to drive only to work and back home. I have to keep proof of current insurance on file with the DMV for three years.

(Then there's the dollar cost of the accident.)

Law -abiding folks must wonder why people like me risk such serious consequences.

Last October the consequences didn't seem as important as buying food and buying enough gas to drive to work until payday. And I drove to work dozens of times without any incident before the accident.

I have a good job, for a college student. But money doesn't go far in the Bay Area and my parents don't live close enough that I could get benefits like free meals, free rent and laundering.

Before my accident I was sharply aware of the consequences of driving without insurance. I just hoped I could get by for a couple of months without an accident.

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From the August 15-21, 1996 issue of Metro

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