Researchers at Stanford University recently published a study showing that a 2013 California law allowing unauthorized immigrants to obtain driver’s licenses led to a significant reduction in hit and run accidents and did not increase the rate of traffic accidents and fatalities. The study’s authors said this latter finding “suggests there is no empirical support for the claim that unauthorized immigrants are less cautious drivers or generally more likely to cause accidents.” Instead, the findings suggest that “providing driver’s licenses to unauthorized immigrants led to improved traffic safety” and to “significant positive externalities for the communities in which they live.” What significance might this finding have for policymakers in North Carolina?
Tag Archives: insurance
Laws governing the operation of mopeds have changed significantly in recent years. Mopeds now must be registered before they may be driven on state roadways, and the owner of the moped must have insurance. An overview of the current legal requirements for moped operation is set forth below. Continue reading →
Suppose my home is broken into and many things are stolen. My insurance company compensates me for the damage to the house and the items that were taken. Two related questions arise if the person who broke in is charged and convicted. Can the defendant be ordered to pay restitution to my insurance company? And can the defendant be ordered to pay restitution to me even though I have already been made whole by my insurer?
In North Carolina, both questions are answered by G.S. 15A-1340.37(d). Under that law, “[n]o third party shall benefit by way of restitution as a result of the liability of that third party to pay indemnity to an aggrieved party for the damage or loss caused by the defendant . . . .” In other words, restitution may not be ordered directly to the insurer. Our appellate courts have long recognized this rule, which was previously codified in G.S. 15A-1343(d). See State v. Maynard, 79 N.C. App. 451, 453 (1986) (“The court thus cannot order defendant to pay restitution to the insurer.”); State v. Stanley, 79 N.C. App. 379 (1986) (vacating the trial judge’s order of restitution to the victim’s insurer). Cf. State v. Ray, 125 N.C. App. 721 (1997) (upholding a trial court’s recommendation that a defendant pay $82,000 to Medicaid, which had paid the victim’s medical bills, as a condition of the defendant’s post-release supervision).
G.S. 15A-1340.37(d) goes on to say that “the liability of a third party to pay indemnity to an aggrieved party or any payment of indemnity actually made by a third party to an aggrieved party does not prohibit or limit in any way the power of the court to require the defendant to make complete and full restitution to the aggrieved party for the total amount of the damage or loss caused by the defendant.” So, the court can order the defendant to make full restitution to me even though my insurer has already covered the loss—which means I can recover twice as far as the restitution laws are concerned. There is no statutory requirement that the court limit restitution to the amount unrecovered through insurance. However, given the practical reality that many defendants will not have the wherewithal to make full restitution, it is a common practice (and within the discretion of the court) to limit restitution to the victim’s deductible or copay.
Not every state takes the same approach to these issues. For instance, some states expressly allow restitution to insurance companies, on the theory they, too, are “victims” or “aggrieved parties” within the language of the applicable state law. See, e.g., State v. Merrill, 665 P.2d 1022 (Ariz. Ct. App. 1983) (concluding that Arizona’s restitution statute was best fulfilled by interpreting “victim” to include any entity suffering economic loss resulting from a defendant’s criminal activity, including the principal victim’s insurance company). As explained by our court of appeals, our legislature has taken a different path, focusing the restitution law on those “who directly suffered damage or loss as a consequence of criminal misconduct,” and expressly excluding insurers, who are, after all, “in the business of insuring against anticipated risks,” and who “derive profit by assuming [them].” Stanley, 79 N.C. App. at 383.
Regarding the possibility of a double recovery by the victim, that too is a justifiable policy choice by the legislature. Better to allow the victim to recover twice than to let the defendant off the hook merely because his or her victim had the good sense to carry insurance. Moreover, restitution is not just about making the victim whole. It is also viewed as promoting the defendant’s rehabilitation and restoration, and as a deterrent to future crimes.
Though the prohibition on restitution to directly to insurers is clear, an insurer sometimes winds up with the money in any event. Many insurance policies include a clause subrogating the insurer to any collateral recovery made by the insured. In N.C. Farm Bureau Mutual Ins. Co., Inc. v. Greer, 54 N.C. App. 170 (1981), for example, an insurer sought to recover $2,500 paid to an insured under a policy covering loss of a cow by theft. The victim of the crime had also received $7,500 in restitution from the man convicted of stealing his cow. The insurance policy included a clause stating that “no loss shall be paid hereunder if the insured has collected the same from others.” Id. In light of that clause—and the fact that the victim reported the value of the cow as $5,000 in his insurance claim—the court of appeals affirmed the trial court’s award of $2,500 to the insurance company.
Jeff wrote last week about the court costs associated with traffic infractions, which are significant, even for minor traffic offenses.
As he mentioned, these costs are not the only financial burden imposed upon drivers found responsible for traffic infractions or convicted of traffic offenses. Drivers who seek representation in such proceedings also incur attorney’s fees. Another potentially significant cost, and one in the forefront of most motorists’ minds, is the increase in insurance rates that can result from traffic convictions.
Automobile insurance policies for North Carolina drivers are governed by the Safe Driver Incentive Plan, or SDIP, established pursuant to G.S. 58-36-65. The SDIP distinguishes among classes of drivers that have a record of at-fault accidents, a record of convictions of major moving traffic violations, a record of convictions of minor moving traffic violations, or a combination thereof, and provides for premium differentials among those classes of drivers. Insurers learn of traffic convictions—a term I’ll use throughout this post to refer to both convictions of misdemeanor and felony offenses and adjudications of responsibility for infractions—by obtaining records from DMV. See G.S. 58-36-65(e) (providing that “[r]ecords of convictions for moving traffic violations to be considered under this section shall be obtained at least annually from [DMV]”); see also G.S. 20-4.24(a) (requiring a state that is a member of the Drivers License Compact to report to another member state a conviction for any offense that the member states agree to report”).
The North Carolina Department of Insurance (DOI) publishes this nifty guide to the SDIP, setting forth the insurance points assigned to each type of conviction for a traffic violation and the corresponding rate of increase for those convictions and adjudications. Insurance points are different from driver’s license points assigned by the North Carolina Division of Motor Vehicles (DMV) pursuant to G.S. 20-16. Driver’s license points matter because DMV may revoke the driver’s license of a person who accumulates 12 or more license points within three years. G.S. 20-16.5(e). Insurance points matter because of rate increases. A single insurance point, which can result from conviction of a minor moving violation, results in a thirty percent rate increase.
DOI’s guide also describes the SDIP exceptions to rate increases. No insurance points are charged for a single prayer for judgment entered per household every three years. And no insurance points are assessed for conviction of speeding 10 mph or less over the posted speed limit so long as the violation did not occur in a school zone and the person has not been convicted of another moving traffic violation within the three-year experience period.
The easiest way to avoid the assessment of insurance points is, of course, not to commit any traffic violations or cause any accidents. But even drivers who occasionally run afoul of the state’s traffic laws can avoid insurance consequences. Such drivers can seek a prayer for judgment continued or plead guilty to or responsible for an offense that does not result in the assessment of insurance points either due to an explicit statutory exemption or because the offense is not considered a moving traffic violation.
For example, no driver’s license or insurance points may be assessed upon conviction of a speedometer violation under G.S. 20-123.2, which is statutorily denominated “a lesser included offense of speeding,” even though such violations must be recorded in the driver’s official DMV record. See G.S. 20-141(o). Similarly, no insurance points may be assessed for conviction of an improper muffler or several other offenses listed in G.S. 20-16(c). Nor may insurance points be assessed upon conviction of failure to light headlamps while windshield wipers are in use. See G.S. 20-129(a)(4).
Other statutory provisions prohibiting the operation of vehicles without proper equipment are silent with respect to whether insurance points apply. See, e.g., G.S. 20-122.1(a) (requiring every motor vehicle subject to a safety equipment inspection that is operated on a highway be equipped with safe tires and making no mention of driver’s license or insurance points); G.S. 20-24(a)(requiring that every motor vehicle operated on a highway be equipped with adequate brakes and making no mention of driver’s license or insurance points). While there is an argument to be made that such violations could properly be considered moving violations since operation of a motor vehicle is an element of the offense, DMV does not consider equipment violations to be moving violations for driver’s license point purposes. My guess is that insurers interpret the SDIP accordingly and assess insurance points only for offenses deemed moving violations by DMV. Notwithstanding the lack of points, conviction of an improper equipment offense carries its own enhanced cost. An additional $50 in court costs is assessed upon conviction of any improper equipment offense. See G.S. 7A-304(a)(4b). This fee is remitted to the Statewide Misdemeanant Confinement Program, “to provide for contractual services to reduce county jail populations.” Thus, the court costs for a person convicted of an improper speedometer offense is not the $188 Jeff referenced in his earlier post; instead, the court costs total $238.