Risk Factor in Auto Policies: Companies Won't Deny Coverage to Illegal Immigrants, but Premium Could Double, Group Says

By James M. Odato, Albany Times Union, N.Y.

Nov. 2--ALBANY -- Undocumented immigrants in New York seeking auto insurance may not be turned down for coverage, but they may get priced out of the market.

"Some people will present a risk that is outside the guidelines of what an insurer is willing to accept," said Robert Hartwig, president of the Insurance Information Institute, a trade group for New York's auto insurers. "Having an auto insurance policy is not a right, just like having a driver's license. Both are privileges."

If an illegal immigrant or person lacking documents on their status in the United States tries to buy insurance, they'll likely be screened heavily.

Insurance agents, Hartwig noted, rely on Social Security numbers to check credit history. If that and other information, including driving records, is missing, applicants for insurance will likely receive quotes that are double-digit percentages higher than normal premium rates.

"Insurers are not obliged to write every applicant coverage," Hartwig said.

Hartwig responded when a reporter called Allstate Insurance to check out an assertion by Assembly Republicans that the company would not accept illegal immigrants as customers. He said he is unaware of any insurer refusing to provide policies to illegal immigrants.

State Insurance Department spokesman David Neustadt said Allstate has not filed an amendment to its business plan to deny insurance coverage to people illegally in New York or lacking a Social Security number. If such an amendment surfaced, he said, the department would be "concerned."

Neustadt said motorists would get a small savings in their premium rates once Gov. Eliot Spitzer's plan to allow illegal immigrants to gain driver's licenses takes effect. The policy is expected to roll out late next year and could allow more than 500,000 people to get the state license.

"We estimate less than a third of the people with new driver's licenses actually get insurance," Neustadt said.

"Immigrant drivers want to be licensed and insured. We think they will pay the premiums if they are somewhat higher but still reasonable," said Chung-Wha Hong, executive director of the New York Immigration Coalition.

Republicans in the Legislature strongly oppose Spitzer's licensing policy, as do some of Spitzer's fellow Democrats. On Thursday, Assembly Republicans followed through on earlier threats to sue the governor in state court over the issue. The suit, filed in state Supreme Court in Albany County, charges the governor's plan violates a law requiring that license applicants have a Social Security number, and that the governor changed state policy in violation of the state constitution and the law.

James M. Odato can be reached at 454-5083 or by e-mail at [email protected].

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