Car-Accident Records Called Unreliable

State records on automobile accidents are so incomplete that it is unfair to base motorists’ insurance premiums on them, according to a new study by the industry-funded Insurance Research Council.

In California, the study indicated, only about 46% of legally reportable traffic accidents actually show up on drivers’ records provided by the state Department of Motor Vehicles.

California ranked 16th in accuracy among the 40 states that allow insurance companies access to driving records, according to statistics compiled by the Research Council. Wisconsin ranked first, but drivers’ records there still included just 71% of legally reportable accidents.

A number of states either have so many restrictions on releasing information or are so inefficient at collecting accident reports that the accuracy of the driving records is extremely poor, the study indicated. For example, only 4% of reportable accidents showed up on official driving records in Missouri and Maryland, 2% in Montana and 1% in New Mexico and Idaho.

Since many insurers dramatically increase the rates for drivers who have accidents on their records, particularly accidents in which they are at fault, the accuracy of the records is important.

In California, under Proposition 103, a driver’s record, rather than where he or she lives, is supposed to be the key factor in setting rates. Drivers with accidents can pay thousands of dollars more than drivers without them.

In the Research Council study, samples of accident claims made to insurers were checked against state records to see whether the accidents were listed. Only claims in excess of the reportable limits in each state were included in the sample. In California, for example, an accident need not be reported unless there was injury, death or at least $500 damage.

In California, the sample size was 1,335. Altogether, the 40-state sample was 27,629.

Donald W. Seagraves, director of the Research Council, said he felt the sample was large enough to assure general accuracy in the study’s findings. Spokespersons for the California Department of Motor Vehicles and Insurance Commissioner John Garamendi did not challenge the validity of the 46% figure given for California.

Elena Stern, a spokeswoman for Garamendi, said he feels “fairly confident that major accidents are accurately reported by the DMV. . . . What the DMV may not be reporting are minor accidents.”

Bill Madison, a DMV spokesman, said, “Whatever is filed is what we get.” He said that law enforcement officials sometimes neglect to report injury accidents and that many drivers apparently fail to file on accidents in which the property damage is more than $500.

The Insurance Research Council is funded by large companies such as State Farm, Allstate and Farmers.

A Farmers vice president, Tony Gasich, said the study demonstrates that factors other than driving record must count in setting rates. “California has the most stringent linkage between driving record and rate,” he observed, “but people see no penalty in failing to file their accidents.”

Jay Edmondson, chief of underwriting for State Farm, called the findings “disappointing” but not surprising. Many state legislatures, he remarked, have taken steps to make it tougher for insurance companies to obtain the records that do exist.

The Research Council study did not attempt to assess the accuracy of state reports on convictions for traffic violations, saying there was no easy basis for judging their accuracy. But it noted that many states exempt large categories from the official reports, including California, which allows violations to go unrecorded when drivers go to traffic school.

The study noted that DMV studies in California had found no evidence that traffic schools improve the subsequent accident rates of drivers who participate in them.

The Research Council said its findings “indicate that the poor driving records of millions of U. S. motorists have disappeared from public view, making it harder for employers and car insurers to identify high-risk drivers.

It added, “Poor driver records also are detrimental to low-risk purchasers of auto insurance, since their premiums help pay the losses caused by high-risk drivers who successfully conceal their bad records.”