At least 16 percent of motorists tool around without insurance, and a Michigan company says it has developed technology that allows police to easily identify and cite them.

InsureNet's database would compile names, license plate numbers and other information about motorists and provide it to some 35,000 law agencies through a nationwide network linking local, state and federal law enforcement. Cops and traffic cameras could use the information to instantly identify uninsured motorists. InsureNet claims the system could save the insurance industry billions of dollars in fraud and generate hundreds of millions in ticket revenue. It says Chicago and Mississippi are among those that may adopt the technology.

"Until now states have had very little opportunity to determine what vehicles on the road are insured," Rowland Day, the company's executive VP, told Wired.com. "We have developed a system that has the ability to be effective on a national level and therefore beneficial to every state."

All states require automobile insurance of some kind, but uninsured motorists generally aren't caught unless they're stopped for another offense. InsureNet would make it easier to identify them and create another use for the traffic and surveillance cameras blanketing many cities. Civil libertarians warn such a system threatens our privacy and brings us closer to a surveillance state akin to England, where there's a camera on nearly every corner.

The Insurance Status System compiles information provided by insurance companies and makes it available to police through the National Law Enforcement Telecommunications System. The secure network, launched in 1961 and based in Arizona, links law enforcement agencies nationwide, allowing them to instantly share information.

The Insurance Research Council estimates one in every six drivers on the road next year won't have insurance. That number is expected to climb if the recession lingers and the unemployment rate rises. Moreover, these uninsured drivers boost the premiums of everyone else by requiring them to carry uninsured motorist coverage, says David Corum, research council vice president.

Corum wouldn't say whether he thinks InsureNet is a good idea, but he did tell Wired.com that it could be tough to execute.

"While theoretically the system might work, it would be difficult to make sure that all the insurance data collected by InsureNet is current," he said. "Logistically speaking, insurance companies must deal with a great deal of lag time when collecting information. Relaying that information to another company might seem simple, but I wouldn't assume it to be."

The American Insurance Association expressed concern about the security of InsureNet's system. "Despite there never being a major breach of the databases of any of the insurance companies in America, we would be very concerned about such a system's ability to maintain the protection of an individual's information," said David Snyder, the association's vice president.

Just 13 states require insurance companies to report customers' names and license plate numbers. Illinois is not among them, but InsureNet recently pitched its system to the Chicago City Council Transportation Committee anyway. Company officials told the panel the National Insurance Status System could generate "well in excess of $100 million" in ticket revenue for the city, according to the Chicago Sun-Times.

The system would use the city's 132 traffic cameras to identify scofflaws. If a camera snapped a picture of an uninsured vehicle, the registered owner would get a citation in the mail. The state's mandatory insurance law carries a $500 fine. If the city levied a $300 fine, it could generate more than $100 million annually, the Sun-Times reports.

The Illinois chapter of the American Civil Liberties Union denounced the system as a threat to privacy.

"We are are deeply troubled by this," spokesman Ed Young told Wired.com. "It seems there is no scheme too outlandish or wild for the city of Chicago in terms of public surveillance. What concerns us most is that the Committee of Transportation even considered generating revenue with fines that wouldn't be based on illegal driving. Such a system would begin to feel like perpetual surveillance."

The transportation committee took no action on the proposal, but InsureNet told Wired.com that Mississippi is interested in the system and that it expects other states to follow suit.
http://blog.wired.com/cars/2009/03/the-uninsured-m.html