Honors Thesis Spotlight: Licensing the Undocumented: Traffic Safety and Auto Insurance Analysis

One of the most hotly debated domestic policies of the modern era has been determining the course of those living in the United States without proper legal documentation, a figure near 11 million people. At the core of the issue is a debate regarding whether the federal government ought to remove these people, provide them with a pathway to citizenship, or some variation of relief. While this continues to be contended, several states have begun providing driving privileges to those, despite their legal status. Supporters of these laws argue that allowing undocumented immigrants to drive improves traffic safety for a variety of reasons. By allowing this group to drive and purchase automobile insurance, they argue, this will reduce the rate of uninsured motorists on the road and therefore, improve overall traffic safety. As more states continue to opt for less restrictive driver’s license policies relating to immigration status, it is important to understand what, if any, impact this has on overall traffic safety, and or the possible benefits to insurance, if any.

The literature on this topic is scant, though the one empirical study that supports less restrictions, indicating that on average these restrictions raise the average annual cost of auto insurance every year, suggesting there may be some cost savings involved with less restrictions, as well as, improved traffic safety. This study will consider the effect of granting undocumented immigrants’ access to driver’s licenses. Additionally, because undocumented immigrants typically don’t have access to drivers’ licenses, they would be disqualified from purchasing automobile insurance, resulting in many having to drive without insurance, increasing the likelihood of hit-and-run incidents. Therefore, one may anticipate that laws extending driving privileges will decrease both the uninsured motorist rate in a given state, as well as, reduce the number of hit-and-run incidents that occur. Yet, a reduction in these factors is not indicative of improved traffic safety. We expect that, while uninsured motorist and hit-and- run figures will improve on real average, in a given state, other loss variables such as, bodily injury liability and property damage liability claims will absorb these reductions. This thesis explores the relationship between less restrictions and automobile insurance rates.

This is accomplished by first testing the claim that passing less restrictive laws does, in fact, make our roads safer by examining whether or not there are more total accidents in a given state, in a given year. Second, this thesis considers whether or not the insurance losses are actually decreasing or merely being absorbed by other liability coverages. If less restrictions do indicate improved traffic safety, we find that consumers, insurers, and policy makers would benefit from further evidence that highlights this impact. This study provides an alternative avenue for examining and drawing conclusions about whether or not granting undocumented immigrants drivers licenses actually reduces cost for consumers. This study also employs a nationally representative dataset to best provide a sound and reliable analysis into understanding the impact that these laws have in all our states.

This study finds there is no statistically significant change in the total number of accidents when allowing undocumented immigrants to drive. Furthermore, this analysis finds statistically significant changes for both hit-and-run fatalities and uninsured motorist to bodily injury ratios, but only when restrictions are implemented, but not when friendlier laws are adopted. It is unclear why this is the case but this is an important avenue to explore. As more states continue to adopt these laws it is very important to provide, sound and un-biased evidence to the discourse. This study seeks to amend information gaps by examining areas that have previously not been considered, as well as, provide a stronger argument with the benefit of more available data and larger samples.

Ricardo Zamarripa Chavez is a 2020 Florida State University graduate.

This post was based on Ricardo’s honors thesis. You can learn more about this project here.

The feature image is from Pexels.

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