Auto Insurance

Will New Jersey Be the 13th State to License Undocumented Immigrants?

Will New Jersey Be the 13th State to License Undocumented Immigrants?

The most recent estimates from the Department of Homeland Security indicate more than 12 million unauthorized immigrants live in the U.S. Currently, only 12 states and the District of Columbia allow this group to legally obtain driver's licenses.
Will New Jersey be the 13th State to License Undocumented Immigrants?
Will New Jersey be the 13th State to License Undocumented Immigrants? Source: Getty Images

New Jersey is considering legislation that would allow undocumented immigrants to obtain driver's licenses in the state. An estimated 466,000 of this population in New Jersey are old enough to drive. Although similar policies have recently been considered in other states, they have been rejected or delayed significantly. New York, for instance, also considered a bill to license undocumented immigrants, but it wasn't addressed during the 2018 legislative session.

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The question of whether to allow undocumented immigrants to obtain a license has been a point of controversy across the nation for years. But what impact will this decision have?

How licensing undocumented immigrants can benefit other drivers

In many regions, it's difficult to accomplish important activities, such as commuting to work, without a vehicle. As a result, some undocumented immigrants drive without a license if they're unable to receive one from the state. Although it's difficult to determine how frequently this occurs, one state has offered a rough calculation. Colorado estimates 16% of its total driving population doesn't carry insurance, and 18% of its uninsured motorists are unauthorized immigrants.

Those in favor of licensing undocumented drivers regularly cite improved safety as a benefit, as they would need to pass road tests and traffic law exams. Unlicensed drivers, who frequently have less driving experience and knowledge of traffic laws, are a hazard for others on the road, particularly as their behavior may be unpredictable to other drivers.

The AAA Foundation for Traffic Safety reported that over 21,000 people were killed between 2007 and 2009 in crashes involving unlicensed or invalidly licensed drivers. However, increasing the rate of licensed drivers will also increase the rate of insured motorists — something that benefits everyone on the road.

Reducing uninsured motorists on the road

To purchase auto insurance, which is required throughout most of the U.S., a driver must provide proof of a valid driver's license. Most undocumented immigrants won't have a driver's license and therefore drive without coverage. This presents significant financial risks for both the driver and others on the road. The uninsured driver risks penalties for illegally operating a vehicle and high potential costs if their own car is damaged. The average collision claim is more than $3,400.

If they are found liable for property damage or another person's injuries, a driver without insurance would also theoretically have to pay for the other person's damage out of pocket. However, unlicensed drivers are significantly more likely to leave the scene of an accident before providing identification. Of those who were not incapacitated or killed and had the option to flee, 35.2% of unlicensed drivers left the scene after a fatal accident, as opposed to just 3.7% of drivers with valid licenses.

Since the average bodily injury liability claim is more than $15,000 and the typical property damage claim is approximately $3,000, other drivers may not recoup these costs after an accident with an uninsured driver. If an insured driver's policy doesn't include uninsured motorist coverage, which isn't a requirement in more than half of states, they often end up paying for damage themselves after a crash with an unlicensed and uninsured driver.

Financial impact of licensing undocumented drivers in NJ

The economic benefit of licensing undocumented immigrants has been difficult to quantify, although Oregon's Department of Transportation estimated that its state gross domestic product would be reduced by between $134 million and $202 million if unauthorized immigrants had their licenses taken away. Experts suggested that unpredictable transportation impacts where people can work and can burden employers.

More tangibly, states that license undocumented immigrants are then able to collect fees typically paid by licensed drivers. These include driving permit fees, license fees and vehicle registration fees. The New Jersey Policy Perspective estimated that the state would receive the following motorist fees if unauthorized immigrants are licensed:

  • $2.3 million for driving permit fees
  • $11.7 million for licensing fees (recurring every four years)
  • $3.9 million in vehicle registration fees

This is on top of the additional $223 million in auto insurance premiums that undocumented drivers would be projected to pay for coverage.

Where can undocumented residents drive legally?

Residents who qualify for the Deferred Action of Childhood Arrivals program (DACA) have consistently been allowed to get a driver's license, and some states are expanding or reinforcing this policy. Rhode Island, for instance, passed legislation in June allowing children of undocumented immigrants to obtain a driver's license at age 16. And Oregon signed House Bill 4111 into law, allowing DACA and Temporary Protected Status recipients to renew limited-term driver's licenses if their status expired due to immigration policy changes.

More broadly, undocumented drivers can currently obtain a driver's license, or a similar certificate allowing them to legally drive, in Washington, D.C., as well as 12 states: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, New Mexico, Utah, Vermont and Washington. These licenses are often restricted, only giving the individual permission to drive but not acting as a valid document for federal identification purposes. For instance, these individuals wouldn't be able to use the license to board a plane.

While drivers may not have to provide evidence of citizenship or legal presence, these states still typically require multiple other forms of documentation to verify their identity and residency, such as:

  • State tax returns or a tax identification number
  • A valid foreign passport
  • Consular identification
  • Status as a dependent of a tax filer
  • Birth certificate
  • Home utility bills

The impact of allowing undocumented drivers to obtain a license and insurance has significantly increased the percentage of covered drivers in some states. For instance, New Mexico's uninsured motorist rate decreased by 24% after allowing undocumented immigrants to get a license in the state. Utah's uninsured motorist rate similarly fell from 28% to 8%.