NEW YORK MULLS LICENSES FOR ILLEGALS

Spitzer sees plan exposing group, lowering insurance rates

A new program designed to grant driver's licenses to illegal aliens will actually lower the amount New York residents pay for auto insurance, state and industry officials say.

Allowing illegal aliens access to a driver's license bucks the national trend. Forty-two states do not grant licenses to illegals, citing the need to curb identity theft and to increase airport security.

New York Gov. Eliot Spitzer, a Democrat, is touting the policy change as a way of bringing a hidden population into the open.

The governor has run into trouble in the state Senate, which voted last week to reject the plan, saying it places state security in jeopardy. But Mr. Spitzer's office says it does not need approval from the state Legislature to proceed.

On Saturday, Mr. Spitzer made a deal with the Bush administration that would allow New York to carry out its plan to issue licenses to illegal aliens - although their licenses would be clearly marked to indicate they are not valid federal ID. The deal put New York in compliance with the federal Real ID Act, which will require secure driver's licenses to be used for purposes such as opening a bank account, buying an airline ticket, receiving Social Security benefits or visiting a federal building.

The state agency overseeing auto insurance estimates that 600,000 uninsured vehicles are on the road in New York. About 200,000 fewer uninsured vehicles will be on the road as a result of the new licensing program, the agency predicts.

"We've assumed they won't get insurance at the same rate as current drivers do, but the program will still drive down the number of uninsured motorists out there," said Hampton Finer, deputy superintendent for rates and competition at the New York State Insurance Department.

Under New York's car-insurance rules, Mr. Spitzer's program will decrease the portion of the auto-insurance premium that covers accidents involving uninsured vehicles by 34 percent. Overall, Mr. Finer predicts a 1 percent to 2 percent decrease in auto-insurance premiums for New York drivers after the program takes effect.

New Yorkers pay some of the highest insurance premiums in the country, so they might not notice any difference in their bills, said Mike Barry, spokesman for the Insurance Information Institute. The typical New York resident pays more than $1,000 a year for auto insurance, he said.

Dick Luedke, a spokesman for State Farm Insurance, said the premiums his company charges New Yorkers will not change one way or the other until the effect of the program is known. One thing is for sure, according to Mr. Luedke: The program is likely to increase the number of insured drivers.

"There are a lot people out there right now driving who cannot get a driver's license and therefore can't get auto insurance," he said. "Now they can get both."

In Maryland, where illegal aliens have been allowed to obtain driver's license permits since 2003, state officials say they cannot determine whether the cost of auto insurance has swayed one way or the other.

"An unlicensed driver may not own a motor vehicle and thus would not have a reason to purchase motor vehicle liability insurance," said Karen Barrow, spokeswoman for the Maryland Insurance Administration. "Persons who do own motor vehicles may fail to purchase the required liability insurance for numerous personal and financial reasons," she explained.

"While decreasing the number of uninsured motorists would result in decreasing the cost of motor vehicle liability insurance in Maryland, the Maryland Insurance Administration has not determined that licensing illegal immigrants has lowered insurance rates in the state," Ms. Barrow said.

Most states require driver's license applicants to show two or three forms of identification, but eight states including Maryland allow some form of driver's license to illegal aliens. The other states are Hawaii, Maine, Michigan, New Mexico, Oregon, Utah and Washington.

Mr. Spitzer's decision to proceed with his insurance plan could hit a big pothole in a few years when a new federal ID program goes into effect.

Under the Real ID legislation, passed in 2005, ID cards will be required for people to obtain a driver's license. The system will be phased in beginning in December 2009.

To get a new approved license, or make an old one conform to the new requirements, motorists will have to produce several types of documentation to prove their name, date of birth and that they are lawfully in the United States.

Maryland's licensing program is also likely to be forced to make adjustments when the standards go into effect.

"In order for Maryland to come into complete compliance with the federal law, it would take some changes in the [state] law," said Buel Young, a spokesman for the Maryland Motor Vehicle Administration.

"Leadership in Maryland needs to take a stand, and they haven't made any final decisions," he said.

By : Gregory Lopes